Impact Report
2023 JulyA Guide tothis Report
We have been able to include more data and analysis in this year’s
report compared to previous years thanks to the success of digitaltransformation in our group companies and the progress of our
financial diaries projects. As a result, this report is considerably
longer than last year's. This short note is to assist readers to navigate
the sections of the report.

This report is divided into five main sections. Each section looks at
Gojo’s impact in relation to one of our five key stakeholder groups:
Clients, People (employees), Community, Environment and Investors.

The longest and most detailed section in this report is the section
on Clients. In the first half of this section (pages 22-50), we examine
our outreach to clients, assess their incomes, show how they use
loans and savings services, and show how they experience groupcompanies' services In the second half (pages 51-58), we outline theresults of our Social Performance audits and describe the status ofclient protection across the group.

Contents
A Word From Our CEO Taejun

6

Gojo’s Vision, Mission, and Guiding Principles

8

A Word From Dai-ichi Life Insurance

10

Business Overview

12

Impact Framework

15

Our Commitment to the SDGs

17

Overview of Group Companies

18

Clients

22

Introduction: Who Are Our Clients?

22

Our Clients in Numbers: An Overview

26

Income27

Usage of Loans

30

Savings

38

How Clients Experience Our Services

43

Experiments in Product Design48

Social Performance Management and Client Protection

51

Social Performance Audits Conducted in 2022-23

51

Client Protection

55

Sharing and promoting best practices

57

People59

Environment

62

Community

64

Investors

66

Our Governance Framework

68

Closing Remarks from the Chair of the Impact Committee

72

A Word From
Our CEO Taejun
I am pleased to see that Gojo publishes our fourth impact report.

This year, the topic is “Who Are Our Clients?” We’ve thought that we
do understand who our clients are, but recently we realised that it is
not an easy question. In this report, we hope to unveil why we think so.

During the last fiscal year, Gojo decided to put social performance
management and impact measurement at the centre of what we do.
We shared this with all group CEOs in the Group CEO offsite in India in
2022 and agreed on this direction.

Without understanding clients, there is no chance for us to serve thembetter. Therefore, we started to dig into clients’ data further, using ourcore banking system dataset, internal and external survey data, andthe financial diaries data that we will discuss in detail in this report.

One special topic in this report is about our financial diaries projects.
By spending enormous efforts on creating daily cash flow reportsof our target segment people and tracking their financial habits,
we gained a deeper understanding of their financial needs andchallenges. In sharing the insights from the financial diaries projects,
we hope to shed light on the realities of our clients’ lives.

Too often, the stories about the people in developing nations aresensationalised, beautified, or distorted. By closely looking at thedetailed raw data, we hope to humanise our clients and paint a moreaccurate picture of their daily struggles and endeavours.

6 | Gojo Impact ReportFor the same spirit, this year’s impact report takes a departure fromthe traditional client success stories. Instead, we have chosen to
share more neutral and nuanced stories from the lives of our financial
diarists. By sharing these stories, we hope to give a voice to those
who are often silenced and to showcase the many ways microfinanceclients manage their money and use financial services.

We understand that the report may be jarring for some. After all,beautiful stories are what we’ve come to expect from typical impact
reports. However, in light of our Truth principle and Empathy value,
we believe that we have to start with the reality of our clients and givethe readers a more contextual understanding of our clients.

We owe a lot of our perspective on our clients to Stuart Rutherford,a microfinance veteran and our Impact Committee Chair. He will beretiring this year from Gojo’s board, but we hope to take forward his
legacy to develop better financial services for our clients.

I hope you enjoy the report.

A Word From Our CEO Taejun | 7

Gojo team in Tokyo with members of the board at an
office party after our March 2023 Board Offsite /Riana Yachi

Gojo’s Vision, Mission,and Guiding Principles
Our Vision
To create a world where everyone can determine their future

Our Mission
To extend financial inclusion across the globe

Our Goal
To enable the provision of high-quality financial services to
100 million clients in 50 countries by 2030

8 | Gojo Impact ReportGuiding Principles
Our Guiding Principles are inspired by Greek philosophy, and centre on the trinity of
Truth, Ethics, and Aesthetics, together with the principle of Consistency. We reference
the Guiding Principles in all of Gojo’s policy documents and strive to follow them ineverything we do.

Truth:

Think and behave rightly

Ethics:Do nothing with which we cannot face our clients, family, and friends

Aesthetics:

Pursue the best quality, the best efficiency, and the best simplicity

Consistency:

Be consistent in what we believe, what we speak, and what we do

Gojo Values
Our name, “Gojo” (五常), comes from the 5 Confucian values of compassion, integrity,
courtesy, wisdom, and trust. We use a modern interpretation of the values to guide ourdecisions and day-to-day work.

Stand by our Clients
We strive to see things from the perspective of our end clients so that
our services support their goals.

Act on Principles
We are guided in all we do by our principles without exception.

Listen FirstWe always keep an open mind and uphold everyone’s right to beheard and respected.

Learn–Think–Share
We challenge the conventional, consider the practical, and share ourknowledge with others.

Be Genuine
We build trust and demonstrate our loyalty by telling the truth without
concern for appearances.

Gojo’s Vision, Mission, and Guiding Principles | 9

A Word From
Dai-ichi Life Insurance
Dai-ichi Life Insurance is committed to promotingsocial impact through impact investing. It was forresponsible investment (particularly ESG

this reason that we decided to invest in Gojo as aninvestment and stewardship activities), andinstitutional investor.

working towards achieving both medium- to longterm financial returns as well as positive impact on

Gojo’s track record following our investment

social issues.

speaks for itself. In the midst of the Covid-19
pandemic and the war in Ukraine, both of which

In 2017, we created an Impact Investment

created a very difficult environment for businesses,

framework to further clarify our commitment

Gojo expanded their operations to five countries.

to addressing social issues through investing

We have been very proud to witness how Gojo has

our assets under management. The very firstprogressed as a business, all the while continuing

investment proposal we considered under thisto extend financial inclusion and improve quality of

new framework was that of Gojo & Company.

life for clients through microfinance.

In line with our mission, “By your side, for life”,

Although the Covid-19 pandemic is drawing to a

our primary business is to provide insurance. We

close, the future continues to be unpredictable asengage in asset management to ensure that wea result of deglobalisation and worldwide inflation

are able to provide the insurance payouts which

due to rising prices of natural resources. In this era

we have committed to delivering to our clients.

of uncertainty, as Gojo and Taejun Shin continue

While ensuring steady returns is an important partto pursue their unchanging mission and vision, weof portfolio management of Dai-ichi Life’s generaloffer them our fullest support as a shareholder foraccount asset, we also feel it is very important

the realisation of their impact.

to work towards a sustainable society throughresponsible investing, by investing in solutions to

Seiji Inagakipressing social issues which are aligned with ourRepresentative Director, Chair of the Board

clients’ concerns.

The Dai-ichi Life Insurance Company, Limited

As a local Japanese venture serving developing
countries in Asia through microfinance, Gojo’s
business is perfectly in line with our aim of bothgaining investment returns and creating positive

10 | Gojo Impact Report

Yangon downtown market, one year after the coup / Taejun Shin

A Word From Dai-ichi Life Insurance | 11

Business Overview
Gojo’s business is to extend financial inclusion

services, such as microcredit and microsavings.

by helping socially impactful financial service

The group companies receive interest and fees

providers succeed. We expand our footprint

from our clients; Gojo then consolidates the groupthrough the acquisition or establishment ofcompanies’ profits and receives dividends andfinancial service providers. Gojo Group now

fees. Gojo provides support for management as

consists of the holding company Gojo & Company

well as equity and debt fundraising, implements(“Gojo”) and eight group companies in fiveglobal standard governance and drives digitalcountries - Cambodia, Sri Lanka, Myanmar, India

transformation to deliver impact at scale.

and Tajikistan - that provide various financial

Due diligence
We conduct a rigorous due diligenceprocess with potential investees,
incorporating the ALINUS indicators. We
focus particularly on potential investees'alignment with Gojo's mission and ability
to achieve both financial sustainability
and social impact.

Funds raised
79% of Gojo’s investors said
their main reason for investing in
Gojo was alignment with Gojo’s
mission, vision and values, or thedesire to invest in social impact(as of March 2021).

Recruitment and retention
We recruit world-class talent fromdiverse backgrounds, and work tocreate a supportive, principled
culture where everyone can be theirbest selves.

12 | Gojo Impact ReportOperations
We work with group companies to improve
local operations, implement best practices,and develop effective policies and processes.
If necessary, the Operations team also
facilitates turnarounds.

Finance
We help group companies to find andnegotiate debt funding to support
their operations.

Capital injection
In 2022-23, we invested $49.9 million in
our group companies to expand theirbusiness and support their continued
growth.

GovernanceOur three-committee board structure
helps formalise our processes formonitoring and reviewing hiring andmanagement decisions as well as groupcompanies' business performance.

Technology
We have developed a Digital Field
Application and Data Warehouse for groupcompanies, and are prototyping newcustomer-oriented solutions.

Management support
We spent $6.6 million on Gojo’s
operating costs this year, enabling us
to provide management support topartners according to their needs.

Impact measurement andSocial Performance Management
We work closely with impact measurement
and SPM leads in each group company toconduct social performance audits and impact
and client satisfaction surveys.

Business Overview | 13

Gojo Group has grown to encompass 1.7 million
clients in 9 years, while maintaining portfolio quality.

Gojo Group Assets Under Management (AUM)

931,717

US$ k

649,207

Sejaya372,985

MIFIDAMAXIMA

271,391

Loan Frame

159,834

Ananya(Cons)
Humo

49,988

AVIOM
SATYA

Mar 2018

Mar 2019

Mar 2020

Mar 2021

Mar 2022

Mar 2023

March 2018

March 2019

March 2020

March 2021

March 2022

March 2023

AUM (US$ k)

49,988

159,834

271,391

372,985649,207931,717

Disbursements (US$ k)

5,307

44,56092,161

146,444

270,967

385,749

No. of lending andremittance clients (k)

65

334

574

711

1,219

1,729

Female Client Ratio (%)

97.95

99.38

99.09

98.95

95.37

96.17

Rural Area Ratio (%)

77.30

87.00

88.72

87.08

82.46

85.67

PAR30 (%)

0.72

0.31

1.78

7.87

7.40

2.95

* Please note that the figures in the table above are a simple aggregation of the eight group companies. AUM includes off-balance items but
excludes transfer of delinquent loans from SATYA to an ARC

14 | Gojo Impact ReportImpact Framework
Our commitment to stakeholder impact
Gojo is committed to maximising impact to clients through extending
financial inclusion. Long-term positive impact to clients is only
possible in the context of thriving employees and local communities,
environmentally-sustainable activities and delivering on our promises
to investors. We therefore also focus on bringing positive impact to ourPeople, Environment, Community, and Investors.

Gojo’s Theory of Change

Ensure sustainability

Environment

Neutralize harm andsupport adaptation
Less harmLong term
profitability

Gojo GroupLong term
profitability

SupportInvestors

ClientFunding

PeopleMaximized
ImpactGood service

SupportSupportEnsure sustainability

Community

Our materiality
Gojo’s materiality takes into account expectations from various
stakeholders to define our priorities for achieving sustainability andimpact, in line with our mission. This assessment enables us toallocate resources to the various issues identified and to predict longterm risks and opportunities for our operations.

Impact Framework | 15

More inportantGojo Group’s materiality map1

F
C

Stakeholders

I

K

E

J

D

Less important

Environmental impact through our activities

B

Environmental and social impact through ourclients’ activities

C

Impact on our community

D

Commitment to Client Protection Standards

E

Well-being of our clientsF

Health and safety of our employees

G

Happiness of our employees

H

Mission alignment

I

Risk management of environmental /social impact on our businessJ

Business adoption to environmental andsocial changes

K

Business ethics and corporate governance

H

G

B

A

Less importantA

More important

Management

Gojo therefore prioritises the Client Protection Standards andemployee well-being to maximise impact and realise our vision,building on a foundation of strong governance and business ethics.

Gojo Group’s materiality

Create a world where everyone can determine their future
through financial inclusion

Client Protection Principles• Fair treatment of clients

Employee Well-being• Avoid over-indebtedness• Satisfaction & happiness• Transparency• Health & safety• Client privacy & data security• Diversity & inclusion• Complaint resolution• Fair labour practices• Affordable & accessible product

Strong corporate governance + High level of integrity & business ethics as foundation• Non-tolerance stance towards fraud, corruption, harassment, discrimination, money laundering• Group corporate governance with transparency and accountability

1 We conducted a survey of key stakeholders from February 15 to April 13, 2022, in which respondents were asked to rate the materialityof each issue from 1 (relatively important) to 5 (significantly important). The graph’s x-axis and y-axis starts from the value 3. Respondents
include 3 board members, 8 Executive Committee members, 12 External (investors, advisors, and NPOs), 6 Gojo members, 6 CEOs of groupcompanies, and 4 SPM leads of the group.

16 | Gojo Impact ReportOur Commitment to
the SDGs
As a business whose core mission is to enable financially excluded
people to overcome barriers to building better futures, Gojo iscommitted to Goal 1: End poverty in all its forms everywhere, Goal
8: Decent work and economic growth and Goal 10: Reduced
inequalities.

At the same time, given the range of products offered by our groupcompanies, the role Gojo plays in supporting group companies’
governance and operations, and the fact that 96% of our clients are
women, our work also touches on Goal 5: Gender equality, Goal 6:
Clean water and sanitation, Goal 7: Affordable and clean energy, andGoal 16: Peace, justice and strong institutions.

A table mapping the data points shared in this report against therelevant SDG targets and Global Reporting Initiative (GRI) disclosures
can be found in the Appendix on page 74.

Our Commitment to the SDGs | 17

Overview of Group Companies 2
Business Overview

In operation
Planning to go shortly

India

Company nameGojo’sownership (%)

Clients(000s)

No. of staff

AUM($ mn)

SATYA

69.05%

1,362

4,549

570

70.37%

85

319

47

35.46%

n/a

93

43

33.39%

49

2,211

126

(Microfinance)

Ananya(SME & MF)

Loan Frame(Supply chain finance platform)

Aviom(Housing)

Tajikistan

Humo

85.87%

99

1,160

91

MyanmarMIFIDA

85.73%

67

547

15

Cambodia

MAXIMA

61.63%

12

294

34

Sri Lanka

Sejaya100.00%

54

281

7

Consolidated total

1,680

7,150

763

Group total

1,729

9,454

932

*As of March 2023**Non-diluted basis. After primary transaction in April 2023 for Humo***Excluding end clients of Ananya's wholesale business and Loan Frame****Simple aggregation of the eight group companies
2 In our Impact Report, we mainly focus on reporting the activities and data of Gojo’s majority-owned group companies SATYA, Ananya,
Humo, MIFIDA, MAXIMA, and Sejaya.

18 | Gojo Impact ReportVillagers in the Ayeyarwady region of Myanmar. They live ina remote area which can be reached only by boat. Their life
remains much the same even after the coup / Taejun Shin

Date of investment

August 2014
MAXIMA Microfinance, Cambodia
12 thousand clients
MAXIMA’s mission is to provide inclusive financial solutions to low-income households
and SMEs for improving their socio-economic situation in a sustainable way. MAXIMA
provides loans for agriculture, home improvement, business and education. They
provide a wide range of loan sizes starting from $50, and offer an innovative small, fast
digital loan product named MBela, which uses a network of community agents and is
disbursed and repaid through a mobile money service. MAXIMA has been certified for
Client Protection since 2018.

February 2015
Sejaya Micro Credit, Sri Lanka
54 thousand clients
Sejaya’s mission is to provide inclusive financial services to the needy andunderprivileged, uplift their economic status, empower them and generate
employment opportunities in a socially responsible manner. Sejaya is one of only 4
licensed microfinance companies in Sri Lanka, regulated by the Central Bank. They
provide group and individual loans, targeting women micro-entrepreneurs who plan touse loans for income-generating activities. Sejaya collaborates with Gojo on a financial
diaries project in Sri Lanka, contributing to the research plans and providing support
for project logistics.

Overview of Group Companies | 19

August 2015
Microfinance Delta International (MIFIDA), Myanmar
67 thousand lending clients / 138 thousand savings clientsMIFIDA’s mission is to extend financial inclusion across Myanmar. They provide
microenterprise, education, and emergency loans as well as voluntary savings forclients, focusing on women and rural entrepreneurs. They have worked closely with
Gojo in the past year to improve their client experience by revising their complaints
mechanism, implementing a call centre system, and reducing the lead time needed forsavings withdrawals. MIFIDA has been certified for Client Protection since 2019.

February 2018
Ananya Finance for Inclusive Growth, India
36 wholesale partners / 99 thousand retail clients
Ananya’s mission is to create sustainable and inclusive impact by serving as a bridge
between potential investors and the unbanked population of India. They provide
wholesale lending and capacity-building support to MFIs, agrifinance providers, andother SMEs. They also reach women micro-borrowers through business correspondent
partnerships with large MFIs in India. In July 2022, Ananya acquired a majority stake intheir long-term partner MFI Prayas Financial Services and plans to further extend theiroutreach by supporting Prayas’ expansion from 30 to 150 branches.

July 2018
SATYA MicroCapital, India
1.3 million clients
SATYA’s mission is to be the preferred choice for people at the bottom of the pyramidin the creation of their enterprises and livelihoods through a holistic approach. SATYA
provides group and individual loans to rural women entrepreneurs, as well as loans
for water, sanitation and hygiene (WASH) and energy. SATYA has received numerous
awards, including Best Tech Savvy Microfinance of the Year at the 2023 NBFC &Fintech Awards, Best MSME NBFC-MFI and Best NBFC-MFI for Promoting Social
Schemes at the 2022 MSME Banking Excellence Awards organised by the Chamber ofIndian Micro Small and Medium Enterprises.

August 2019
AVIOM India Housing Finance, India
49 thousand clients
AVIOM’s mission is to empower women and provide them with financial independence.
They serve women borrowers in semi-urban areas who typically work in the informal
economy and might otherwise struggle to provide the documentation needed toobtain a loan. In addition to affordable home loans, AVIOM also provides financefor home upgrades and sanitation. Their sourcing model, AVIOM Shakti, provides
employment opportunities for rural women by enabling them to earn commissions forreferrals to AVIOM.

20 | Gojo Impact ReportDecember 2019
Loan Frame Technologies, India
881 SME clients
Loan Frame is a supply chain finance platform serving the ‘missing middle’ by aiming
to build the largest SME lending marketplace in India. Loan Frame uses proprietaryscoring and risk assessment algorithms that process traditional and alternative data,and has automated all major workflows to enable same-day loan disbursals.

September 2021
CSJC MDO Humo, Tajikistan
99 thousand lending & remittance clients / 136 thousand savings clients
Humo’s mission is to provide high-quality, affordable financial services to the rural
population, as well as to promote the development of small and medium-sizedbusinesses in poor areas of Tajikistan. In addition to a wide variety of individual
and SME loans, deposit and remittance services, Humo also offers its customers amobile wallet called Humo Online with mobile banking features to facilitate quick
access to online payment and banking services. In 2022, Humo secured the ‘Best
Islamic Finance Product’ Award from AlHuda Centre of Islamic Banking & Economics(CIBE) - UAE.

May 2022
MyShubhLife, India
27 thousand users
MyShubhLife (MSL) is a digital lending and savings platform catering to theunderserved ‘Next Half Billion’ segment, who are not yet part of the formal credit
system. This segment comprises households with an annual income between rs.
140,000 to 450,000 and makes up 45% of the population but has access to only 8%of the formal credit. They offer services such as small and large-ticket personal loans,earned wage access, bill payments, insurance, Systematic Investment Plans (SIPs),e-gold and e-filing taxes via their Android app available in 6 Indian local languages.

Overview of Group Companies | 21

Customers of SATYA MicroCapital / Taejun Shin

Who Are Our Clients?
Introduction“Who are our clients?” is the fundamental question at the bottom of
every question about impact in microfinance.

For every question about what drives differences in loan sizes fromone country to another, or why one MFI (microfinance institutions)
reports large numbers of jobs created when another reports so few,
or why clients’ incomes increase after taking loans from some MFIs
and others report little or no change, the answer comes from someversion of the question: Who are the clients?

Who are our clients, and how do they use financial services? Who
are our clients, and where do they live? How do they support
themselves? How poor or wealthy are they? How do they set aside
resources for the future? What are their ambitions? What part dothey play in their household’s money management, and what otherfinancial services do they use to make money work for them?

22 | Gojo Impact Report

These questions are crucial for designing useful products andresponsible services for financially vulnerable people. Yet mostorganisations in the ecosystem are far from exploring this theme
in any systematic way and applying the answers in practice. While
practitioners may have a general intuitive sense of who their clients
are, investors who operate at a distance find it challenging to imagine
the nuances of clients’ lives, which drive the everyday choices they
make. The two most commonly reported indicators, the percentage
of female clients and rural clients, barely scratch the surface.

Gojo has spent the past two years establishing channels to thefield to better understand our clients. We have integrated groupcompanies’ core banking system data into our data warehouse,
implemented standardised client satisfaction and impact surveys andset up our own financial diaries projects in Cambodia and Sri Lanka.
In the following sections, we discuss what we have learnt about ourclients so far.

Our data sources
Data sources
Broad
representationof clientpopulation

Deep
understanding ofpoverty and money
management

Description

Purpose

Scope

Loan applicationand transactiondata

To monitor
outreach, usageof products
and change inbasic household
situation

All clients

SurveysSurveys on client
satisfaction,
outcomes and reasonsfor exit. In 2022-23,
we participated in
60 Decibels’
Microfinance Index.

To answer specific,
targeted questions
about clients

Representative
sampleFinancial
Diaries

High-frequency
panel data on the
cashflows of lowincome households

To transform
Gojo’sunderstandingof the poor so we
can create better
financial services

Small sample(50~150)

Core Banking System
and Management
Information System
Data

Who Are Our Clients | 23

Introduction to financial diaries
Our financial diaries projects are our primary source of qualitative
data about how low-income people live and manage their money. In
2020, inspired by the work of our Outside Director Stuart Rutherford
and his Hrishipara Diaries project in Bangladesh, we started
exploring opportunities to set up our own financial diaries projects.
The pandemic delayed the beginning of data collection for almosta year, but in October 2021 we finally had two financial diaries
projects starting in Cambodia and Sri Lanka. Data collection for the
Cambodia project ended in October 2022, and the Sri Lanka projectis still ongoing.

Cambodia Financial Diaries Overview

Areas covered

5

provinces# of diarists

149

households

Low-income households with
the IDPoor card. Half the sample

Kampong Cham

did not have loans from MFIs or
banks at the time of the baseline
survey. We deliberately selected

Kampong Speu

Phnom Penha larger number of MAXIMA

Kandalclients (~40% of the sample) as
we wanted to be able to cross-

Kampotreference core banking systemdata with diary data.

Duration# of transaction records

Oct 12, 2021 to Oct 24, 2022

220,226(54 weeks)
Funded by
Data collection methodology

JICA Cambodia

Phone calls and in-person visits
by enumerators

Research agencies involved

2-3 times a week

BN Consult

24 | Gojo Impact ReportFinancial Diaries notebook used in Sri Lanka /Taejun Shin

Sri Lanka Financial Diaries Overview
Chavakachcheri

Areas covered

9

rural and urban areas in the Northern,Western, Southern and Central Provinces# of participants (as of March 2023)

95

participants

Low-income households

NarammalaDuration
Nov 5, 2021 - present
Data collection methodology
Self-recording in notebooks, which are thenKasbewa
Matugama

Wattegama
RagalaMonaragala
Pelmadulla

Galle

photographed by enumerators once a week
# of transaction records
157,112Funded by
Gojo & Company
Research agencies involved
Sparkwinn Research

Who Are Our Clients | 25

Our Clients in Numbers:
An Overview

1,729,000
loan / remittance clients

274,869
savings clients

96%

female clients86%

rural clients

44%

accessingfinance forthe first time

83%
voluntary savings

Financial accessbut it does indicate that Gojo’s group companies

The typical clients of Gojo’s group companies

are targeting people who are more likely to be

are women who live in a rural area. According to

low-income, and therefore more likely to facethe 2021 Global Findex, both across the globe

challenges with managing money.

and in the countries where we operate, thedifference in access to loans for women and

Just over half of our clients had previously

men and rural and urban residents is very slight,

accessed loans from MFIs or banks before taking

ranging from 1 to 5% depending on the country.

loans from our group companies. In 60 Decibels’

However, globally, women and people in rural

Microfinance Index survey (a standardised impact

areas are significantly more likely to be poor thansurvey conducted with over 120 MFIs worldwide)

men and people in urban areas respectively. The

conducted with MAXIMA, Humo, SATYA, MIFIDA

percentage of female and rural clients is therefore

and Sejaya between December 2022 and March

not necessarily an indication that our clients are

2023, 43% of the clients surveyed said that they

underserved in terms of borrowing opportunities,

had not previously had access to a loan similar

3 Based on data from the 2021 Global Findex indicators: Borrowed any money from a formal financial institution or using a mobile money
account, female (% age 15+) (% age 15+); Borrowed any money from a formal financial institution or using a mobile money account, male (%age 15+); Borrowed any money from a formal financial institution or using a mobile money account, rural (% age 15+); Borrowed any moneyfrom a formal financial institution or using a mobile money account, urban (% age 15+). NB: rural and urban segmentation is not available for
Sri Lanka and Myanmar.
4 Rural and gender poverty headcount ratio data is not collected in a systematic way country by country. This statement is based on
projections from UN Women (https://data.unwomen.org/features/poverty-deepens-women-and-girls-according-latest-projections) and datafrom the 2019 UN SDGs report (https://unstats.un.org/sdgs/report/2019/goal-01/).

26 | Gojo Impact Reportto the ones provided by each company. This is

As microentrepreneurs running small farms orlower than the global benchmark of 58% across all

businesses in their local communities, 76% of ourthe companies participating in the Microfinanceclients have combined business and household

Index, but is understandable considering thegross income of between $7 and $9 PPP5 perprevalence of microfinance in many of thecapita per day. This places most clients up to 30%

countries where we operate. Group company

above the World Bank’s poverty line of $6.85 PPP6

CEOs have noted that first time access to loans

per capita per day. This suggests that although

is not necessarily the most relevant indicator of

Gojo’s clients are not among the very poor,

impact in countries where there are concerns

they belong to a lower-middle income segment

about over-saturation and over-indebtedness,of society which is vulnerable to poverty andsuch as Cambodia and Sri Lanka.

probably experience challenges with managing
money in order to pay for both daily expenses andIn the following sections, we present data fromlump-sum expenditures such as school books andour group companies’ core banking systems anduniforms, hospital bills, weddings, and fertiliser for

financial diary projects to look at clients’ lives

the next planting season.

through the lenses of (1) their income, (2) how they
use loans and (3) how they save.

Since microfinance is often closely associatedwith poverty, some readers of Gojo’s impact report

Incomemay be surprised to learn that our typical clients

Based on loan application data, the primaryearn above the World Bank’s poverty lines. The

income sources for most of our clients areprimary reason for this is the loan assessments

agriculture, microenterprises such as small shops

carried out by group companies to preventand restaurants, and wages from jobs such as

overindebtedness. In order to ensure that clients

garment manufacturing.

are not taking loans they will be unable to repay,
group companies focus on microentrepreneurs

Breakdown of income sources/occupations(n=995,263)
Wages
9.47%

who can use loans for income-generating
purposes and who have existing cash flows which
are large enough to repay their loans, rather
than very poor clients such as casual daily wage

Microenterprise
31.74%

Agriculture
58.79%

labourers, whose cash flows tend to be smaller
and even more unpredictable, and who may
therefore struggle with the loan sizes and regular
repayment schedules offered by group companies.

Note: Data from SATYA, Ananya, Sejaya, MAXIMA,
Humo as of March 2023

Stringent credit appraisals are the reason Gojo

5 PPP stands for Purchasing Power Parity, which is the rate at which the currency of one country would have to be converted into that ofanother country to buy the same amount of goods and services in each country (see https://www.imf.org/en/Publications/fandd/issues/
Series/Back-to-Basics/Purchasing-Power-Parity-PPP). It is not the same as the market exchange rate.
6 The World Bank updated its International Poverty Lines in September 2022. The new poverty lines are $6.85, $3.65 and $2.15 PPP per
capita per day in 2017 PPP for upper-middle-income, lower-middle-income, and low-income countries respectively. The World Bank reports
poverty rates against all 3 lines for all countries.

Our Clients in Numbers: An Overview | 27

Income analysis by poverty line
Income distribution of Gojo Group clients
70.00%
60.00%
50.00%A small percentage (8%) of clients withincomes of >$10 PPP per capita per
day are likely to be larger SME clients,
who state business income rather thantake-home household income on theirloan applications

40.00%
30.00%
20.00%
10.00%
0.00%
0

1

2

3

4

5

6

7

8

9

10 20 30 40 50 60 70 80 90 100$PPP per capita per day (2017 PPP)
Note on this chart: The income data shown here is drawn from loan application data in group companies’ Core Banking Systems. This data
is primarily used to support the loan assessment process rather than to assess poverty, and may therefore be subject to various inaccuracies.
For instance, some clients may inflate their statements of their income in order to receive larger loans, or may only be able to provide roughestimates of other household members' income. We were not able to retrieve data on the actual number of household members for eachclient, and therefore used the national average number of household members for each country as a proxy in our calculation of PPP per capita.

Group has been able to maintain low Portfolio At

Case study from the Cambodia Financial

Risk (PAR) figures over the years, as shown above

Diaries: Samang and Kunthea

in on page 14.

Diarist 180 (“Samang”)7 from Kampong Chamin Cambodia, lives with his wife (“Kunthea”), a

However, income instability and uncertainty,

16-year-old daughter, and a 9-year-old grandchild.

which make active money management such an

Samang and Kunthea are the only two income

important part of low- and lower-middle income

earners in their household. Kunthea is the main

people’s lives, do not stop at the threshold of thebreadwinner for the household, and earns money

poverty line. Even microentrepreneurs earningby selling snails, waterlilies, lotus flowers andaround $20 PPP per capita per day can experienceother agricultural products from their land in thesignificant volatility and unpredictability that makelocal market. Samang is a daily wage labourer andit necessary to liquidate assets, request gifts orundertakes construction jobs for villagers fromremittances from family, or reduce consumption totime to time. In addition, they occasionally receive

make ends meet. This can be seen in the following

small payouts from the government as holders of

example from our Cambodia Financial Diaries.

the IDPoor card, a card issued by the government
to low-income households, and receive fairly large

7 All diarist names used in this report have been changed to protect the privacy of participants

28 | Gojo Impact Reportremittances of $50-$125 once or twice a monthtide the household over, taking on construction

from a child working in Phnom Penh, who may bejobs with large payments and sending larger

the parent of the grandchild who lives with them.

remittances respectively. In mid-August 2022, shestarted what appears to be a more stable businessThis chart of their household’s cash flows fromselling fish, vegetables and meat in the village, andOctober 2021 to October 2022 is an example

began to see steadier and larger inflows.

of the patchwork of irregular inflows whichcharacterise the incomes of our client group.

In total, over the 12 months of the project, Samang

Kunthea was able to make frequent and relatively

and Kunthea’s household had 5 different recurringlarge sales of agricultural products in October andincome sources. Their lowest earning month was

November 2021, but sales dropped off at the end

June 2022, where their total income was $98.75.

of 2021 and stopped almost entirely from mid-May

Their highest earning month was October 2022,

to July 2022. In this period, her husband Samang

where they earned $1,802.50.

and her son in Phnom Penh stepped in to help

Diarist 180’s income
800
700
600
500
400

Agriculture (in)Business income

300

Gifts (in)Government/NGO

200

Others (in)Property rental (in)100

Remittances
Salary0
Oct Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

For a household like Samang and Kunthea’s,

Morduch show in their recent paper, “Poverty

income can vary from day to day or week to

at Higher Frequency”, even households whose

week for a host of reasons including the weather,average monthly income is over the poverty line

seasonality, prices of raw materials, their rapport

can experience periods in a year where they

with friends and family and their health. Most of

are living under the poverty line. Samang andthese factors are out of their control.

Kunthea’s household is one of the higher earning
households in our Cambodia diaries. If we takeAs development economists and poverty

the average of their income over the whole

researchers Joshua Merfeld and Jonathan

year, they earned $19 PPP per capita per day.

Our Clients in Numbers: An Overview | 29

However, in reality, due to the income instability

income instability which characterises the lives

they experienced from week to week, they spentof low-income people means they likely regularly

two months of the year (December 2021 and June

experience periods of scarcity where they live2022) living under the $6.85 poverty line.

8

below the line. This makes it all the more important
for them to have access to useful financial services

The same is very likely to be true for most, if not

which enable them to smooth consumption andall, of Gojo’s clients — even though their averagemove money through time and space.

income puts them just above the poverty line, theUsage of Loans
What Clients Spend On

Total # of individual, SME, and group clients

Number of Gojo Group clients by loan products used
1,800,000
1,600,000

134,969

30,15012,308

5,003

477

301

278

1,516,836

1,400,000
1,200,000
1,100,000
800,000
600,000
400,000
200,000
0

Business

General Agriculture Consumer Housing Transfers Overdraft Employee
Facilities
andSanitation
Loan product

Income generation is the stated purpose of thefrom the Cambodia Financial Diaries demonstrate

vast majority of loans provided by Gojo Group.

the complicated reality that loans taken for

Business and agriculture loans make up 91%

supposedly income generating purposes may notof the loans in our portfolio. Even though groupalways be used to purchase assets or inputs.

companies such as SATYA, MAXIMA and MIFIDA
conduct regular utilisation checks to ensure loans
are used for the stated purpose, several examples

8 Merfeld, Joshua D. and Morduch, Jonathan, Poverty at Higher Frequency (April 05, 2023). KDI School of Pub Policy & Management Paper
No. DP23-03, Available at SSRN: https://ssrn.com/abstract=4421947 or http://dx.doi.org/10.2139/ssrn.4421947

30 | Gojo Impact ReportWe can compare and contrast the examples of two

same day. This is a typical example of what wediarists here:

might expect to see from an income-generating
loan — a large loan with a corresponding

Diarist 120 received a $13,000 loan in December

investment of approximately the same size.

2021 and bought a harvester for $10,000 on the

Diarist 120
15,000$13,000
MFI Loan

10,0005,000

0-5,000-10,000$10,000
Harvester-15,000
Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Diarist 245
14,000$10,000
MFI Loan

12,00010,000
8,000
6,000
4,000
2,000
0
-2,000$2,270Moto-4,000
Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

In contrast, Diarist 245 took a $10,000 MFI loan

What they did with the rest of the money from thein July 2022 “for expanding their business” sellingloan is unknown. We have heard from the researchsarongs. One week later, they bought a motorbike

agency in Cambodia that it is not uncommon for

for $2,270, possibly for transporting their goods

households to sometimes keep thousands ofto the market and selling them as a mobile seller.

dollars in cash at home.

Our Clients in Numbers: An Overview | 31

Although focusing on income generation is an

In Stuart Rutherford’s Hrishipara Diaries, out ofimportant part of a lender’s strategy to maintain

240 loans taken by 47 diarists from 2015 to 2022

portfolio quality and prevent over-indebtedness,for which income generation was the purpose

it does not follow that income-generating loans

declared to the MFI or bank, approximately 30%

are therefore more “impactful” than non-income

were used for purposes that were related togenerating loans, contrary to the beliefs of some

supporting or expanding diarists’ income streams.

investors and MFIs. This sets up a distinction

The remaining 70% were used to repay debts, towhich does not match how clients themselvesfund marriage celebrations, to manage liquidity fortend to think about loans.

daily expenses, or to on-lend to family and friends.

As Julie Zollmann, a Nairobi-based development
9

In fact, the line between income-generating andresearcher, writes in Living on Little, low-income

non-income generating uses of money becomespeople want money to always be working forless and less clear the more we look at the details

them. But this does not necessarily mean thatof how loans are used in the Hrishipara Diaries. A

money should always be invested in income-business loan used to fund marriage celebrations

generating pursuits. Money needs to be used in

may result in increased income for the household

ways that will bring the greatest possible value tothrough the added income of the new son or

the person and their family. A business has value

daughter-in-law. A business loan used to constructin terms of expected future cash flows. A housea new room in the borrower’s house may improvehas value in terms of dignity and comfort. A goodtheir overall living conditions, but it may also

set of speakers for playing music may have value

give them a better organised environment inin terms of personal pleasure, or one’s ability towhich to produce the garments which they sell.

contribute to community entertainments. To our

Buying assets or inputs for businesses are notclients, the distinction between the value createdthe only activities which bring more money into a

by a business investment and the value created byhousehold. Allowing flexibility in how a client uses

paying for something to improve one’s quality ofa loan can be a key factor in increasing its impact,

life is not clear-cut.

by enabling the client to decide how best to makemoney work for them.

9 Zollman, J. (2020) Living on Little: Navigating financial scarcity in modern Kenya. Practical Action Publishing. Retrieved from: https://www.
juliezollmann.com/living-on-little

32 | Gojo Impact ReportHrishipara diaries — number of loans to % change in income% change in income from start of diaries to end 2022

400%

300%

200%

100%

0%
0

5

10

15

20

25

30

35

-100%

-200%
Number of loans (>9,999 taka) taken from 2015 to 2022

1 or more loans
0 loans taken

We looked at the relationship between the number of relatively large (>9,999 taka) loans taken by each Hrishipara diarist over the 7 years of
the project from 2015 to 2022 and the change in their average monthly income from their first 12 months in the project to the most recent 12
months (January to December 2022). The correlation is very weak with an r value (correlation coefficient) of 0.19.]

Gojo has been wary of drawing a causal linkasset such as a sewing machine, or of businessbetween loans and income increases as an

inputs such as seeds or fertiliser.

outcomes measure, not only because of the weakacademic evidence around this, but also because

This sort of one-to-one relationship, where

we see from financial diaries that most of the time,

one loan goes entirely to pay for one asset, isthe highs and lows of income which characterise

indeed a common way in which loans are used.

the lives of microfinance clients have little to do

However, it is also a very common reality thatwith their usage of loans. We chose instead to

microfinance clients patch together many different

focus on increased resilience in our client-centricfinancial sources, including loans, to support one

framework (see our Impact Reports from 2021

large expenditure, or even to support multiple

and 2022) and on measuring the number of

expenditures.

options clients have for accessing finance as a key
indicator of impact.

Many-to-one relationships typically happen
when the intended expenditure is too large to be

How Clients Spend Their Loanscovered by any single loan which an individual

When we think of how someone spends a

can obtain in the time available. Examples of

microfinance loan, the standard image that comes

this can be found in the Hrishipara Diaries,

to mind might be of a lump-sum purchase of an

where households expend great efforts to raise

Our Clients in Numbers: An Overview | 33

thousands of dollars from MFIs loans, mortgages

from family members to manage the thousands ofon their land, gifts from relatives and savings todollars needed to hold a wedding reception andsend a family member overseas for work. We also

make necessary house upgrades to welcome thesee similar behaviour in the Cambodia Financial

new bride.

Diaries, where people combine loans with gifts

Diarist 149
4,000

Gift

3,000

$2,000
MFI Loan

2,000$1,000
MFI Loan

1,000
0-1,000

Housing$400 Boat+ Loan Repayment

Wedding
Loan Repayment-2,000-3,000-4,000

Wedding-5,000
Oct Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Jun

Jul

Aug

Sep

Oct

Diarist 50
4,000$3,500
MFI Loan
Gift

3,000
2,000
1,000
0

Toilet-1,000-2,000

Wedding-3,000$3,000
Wedding-4,000
Oct

Nov

Dec

34 | Gojo Impact Report

Jan

Feb

Mar

Apr

May

We also see loans being used in combination withalso received wages of $140 from his job as amultiple funding sources when people are working

government employee on 28 December. In theon projects that take place over several weeks

new year, on 3 January, he resumed his purchases

or months. A classic example of this is home

for the house, buying a carpet and shelves, moreconstruction projects.

sand and cement, and tiles ($1,145).

Case study: Diarist 142’s home construction

Finally, his son sent him a further $200 on 11

project

January, and the following week Kosal bought zinc

Diarist 142 from Cambodia (“Kosal”), embarked on

and nails for $50 to make the roof of the house. At

a home-building project from December 2021 tothis point it seems his house was finished.

January 2022. On 1 December, he took a $1,250
loan from an MFI, and the next day, used $1,213 of

By combining a loan with remittances and gifts

it to buy wood “to build a house and its footrest”.

from family, asset sales and wages, Kosal raised$2,885 for a project which cost him $2,872.

The next week, he received a $200 remittance

Although the loan was his single largest inflow forfrom his son working in Phnom Penh and a $500

the project, it ultimately accounted for less thangift from his mother. He also sold a goat forhalf of the funds which Kosal channelled into his$245. The week after that, he made several large

new house.

purchases for his construction project, such as
nails, paint and wooden boards, sand, rocks andWhen people build houses in countries likecement, totalling $464.

Cambodia or Sri Lanka, they sometimes end
up building something different from what theyAt the end of the year, on 25 and 26 December

originally planned due to changes in their budget

and 1 January, his son in Phnom Penh againor the prices of materials, and often the building

sent him several remittances, $350 in total. Kosal

project takes longer than they originally planned.

Diarist 142
2,000$1,250
MFI Loan

1,500
1,000

Remittance

500
0
-500

Tile, Cement, Sand
-1,000$1,213Woods-1,500
Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Our Clients in Numbers: An Overview | 35

If a large loan is taken for the entire estimated costbecause of the value that the loans bring to theirof the home building project at the start, there isrespective lives, or because of differences ina risk (as we will see in the example of Diarist 51

their social capital and ability to rely on family

below) that plans or prices may change over theand neighbours for help. These intangible factors

course of the project, and the borrower may as acannot easily be captured in day-to-day diary data.

result be saddled with a loan that is either larger orsmaller than they need.

Nevertheless, we have been able to see a few
clear examples of over-indebtedness and highBy matching a large loan to the initial large outlay

levels of debt stress in both the Cambodia and Srifor the house structure and smaller cash flows

Lanka diaries projects.

to his subsequent supplementary purchases,
Kosal was able to finance his project in an “agile”

Samang and Kunthea (Diarist 180): Repaying 9

way that matched his process and timeline. This

concurrent loans

enabled him to minimise the risk of either having

From October 2021 to October 2022, Samang

to pay interest for loan funds that were sitting

and Kunthea, whom we introduced above in theunused or having to return to the bank or MFI tocase study about income, made 43 repayments

ask for more money if things did not go to plan.

totalling $5,570 (53% of their income) to 8 MFIs
and 1 private lender for existing loans taken before

Debt stressthe project started. This was despite the National

Over-indebtedness is not always easy to identify

Bank of Cambodia’s regulation that an individualin financial diaries data, because of its partly

can only have 2 outstanding MFI or bank loans

subjective nature. Two households may haveat any time, and was the largest number of loans

identical debt service ratios and the same number

held by any household in our financial diaries

of loans, but may feel differently about their debt

sample. Most borrower households were repaying

Diarist 180's loan repayments
Oct Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

0
-100
-200
-300
-400
-500
-600

MFI 1
MFI 2
MFI 3
MFI 4
MFI 5
MFI 6

-700

MFI 7
MFI 8

-800

36 | Gojo Impact Report

Private LenderNumber of loan repayments made by Diarist 180
Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22

MFI 1

1

1

MFI 2

1

MFI 3
MFI 4

1

1
1

1
3

1

1

1

1

1

1
1

Total

1

1
1

1

1

1

MFI 7

1

MFI 8

1

PrivateLender

1

2

2
2

7

1

2
1

2

4

1

8
4

2

MFI 6

8
8

1

MFI 5

Total

1

2

2

Jul-22 Aug-22 Sep-22 Oct-22

6

1

3

4

4

3

6

1-2 loans over the course of the project.

3

3

4

2

1

2

2

daughter aged 2. In August 2020, Nimali had her
second child. Some time after that, she and her

In the table above, we see that in most months

husband began to think about expanding their

Samang and Kunthea make 3-4 payments, but to a

two-room house for their growing family.

different group of MFIs each time. The irregularityof their payments to each institution suggests

By the time we started collecting data from themthat they juggled their debts during this period byin December 2021, Nimali and her husband had

delaying payments wherever possible and paying

taken two housing loans from MFIs with weekly

just enough each time to keep each lender happy.

repayment schedules, as well as an additionalloan to help with earlier repayment difficulties

Towards the end of the project in late 2022, things

with the two housing loans. They had bought

improved for Samang and Kunthea. It seems theymaterials for the additional room and had started

were able to clear most of their debt obligations,but not finished it. They may have been planningand were only making ongoing payments to 3

for Nimali’s husband, a mason worker, to build

MFIs at the time the project ended. They also

the room, but Nimali’s husband had been

started a business in August 2022 and wereexperiencing recurrent foot infections connectedmaking more money than before, though it is

to a childhood disease and became unable tounlikely that any of their loans were used to start

work as often as before. Nimali herself does not

the business.

work, which is very common for married womenwith young children in Sri Lanka.

Diarist 51: Debt stress and loss of income
Diarist 51 from Sri Lanka (“Nimali”) is a young

Nimali and her husband struggled to manage

mother who lives with her husband and two young

their repayments on their reduced income. Fromchildren — an elder son in Grade 5, and a small

December 2021 to March 2022, they madeOur Clients in Numbers: An Overview | 37

36 payments — paying almost 1 out of every 2

go on. In April 2022, with the co-signature of adays — of rs. 168,290, 122% of their income infriend who is a government employee, they went

the same period. During this time, their roof had

to a large bank and shared their situation, and took

also started to leak and they needed to find morea very large loan of rs. 500,000 to consolidate theirmoney to repair it. When we visited Nimali, shedebts. Over the next 3 days, they used rs. 260,000

told us of the incredible stress they felt during thisto pay off their 3 pre-existing loans.

period. The diary records of their loan payments,
sometimes rs. 1,000 at a time, sometimes 10,000,

Although they had planned to use the rest of thesometimes every day for four days straight, andnew loan to repair their roof and finish the building

sometimes just once a week, tell a story of a

project, they told us that they were having difficulty

family desperately scraping together whateverwith this because of the rising prices of building

money they had to keep up with their debt. Nimali

materials during the financial crisis of 2022. At thefrequently turned to her sisters for small amounts

time of our visit in December 2022, they had notof money to make sure the family could survive.

finished either the roof repair or the constructionof their additional room.

At the end of March, Nimali and her husband
stopped repaying the loans altogether, unable to

Diarist 51
600,000
500,000
400,000
300,000
200,000
100,000
0-100,000-200,000
Dec

Jan

Feb

Mar

In - Salary/Income

Apr

In - Loan Taken

May

Out - Loan Repayment

Savings

MFIs taking deposits in the countries where we

In Gojo Group, only two of our group companies,

operate. MIFIDA and Humo both offer compulsory

MIFIDA and Humo, offer voluntary savings. The

savings (where savings are used as collateral forprimary reason for this is regulatory restrictions on

a loan) as well as voluntary savings. Humo offers

38 | Gojo Impact Reportvoluntary term deposit accounts and voluntary

Humo client is $179.60. The economic situation

general savings accounts.

in Myanmar continued to be extremely difficult in
the past year. As a result MIFIDA clients did not

As of March 2023, we have a total of 229,093

deposit frequently and savings balances tend tovoluntary savings clients in MIFIDA and Humo,be very small compared to Humo in Tajikistan.

compared to 110,225 in March 2022, a 107%
year on year increase. The average voluntary

Savings behaviour among microfinance clientssavings balance per client in MIFIDA is $17.20,

and the poor is primarily driven by the (1)while the average voluntary savings balance peravailability and (2) accessibility of savings services.

Average savings per client in MIFIDA and Humo
MIFIDA

Humo

Average voluntary savings per client(USD)$17.20$179.60

Average compulsory savings per client(USD)$22.47$189.50

Availability of savings services

transactions with community savings groups

Due to regulatory restrictions, most MFIs aretotalling around $23,780. 266 of those transactions

not able to offer savings services in most of ourwere conducted by two diarists, 364 and 381, who

operating countries. This drastically limits the

saved daily in ROSCAs for several months during

number of formal savings options available to low-

the project.

income people.
In contrast, only 4 diarists conducted 15
In Cambodia, at our endline survey for the financialtransactions totalling around $1,638 where they

diaries, only 4 out of 149 diarists had any savings

either deposited or withdrew savings from a bank.

in a formal financial institution. Instead, people

In the absence of micro-savings services, low-

were much more likely to have assets in the form

income households have found alternative waysof jewellery or livestock. 43 diarists said they held

to save and invest their money. But these methods

jewellery as savings, and 103 diarists had someare not without their risks — ROSCA scams havesort of livestock. Community savings groups such

become increasingly common in Cambodia

as ROSCAs10 (known locally as tong tine, fromrecently, and many fear losing their money to an

the French tontine) are also popular. During theuntrustworthy group leader.

period of the diaries, 30 diarists conducted 588

10 ROSCAs are Rotating Savings and Credit Associations, and are groups of individuals who make set contributions to and withdrawals froma common fund. Loans can also be made to members of the group from the fund. ROSCAs appear in various forms in many countries allover the world.

Our Clients in Numbers: An Overview | 39

Savings in the Cambodia Financial Diaries

Where diarists put their savings

Savings in community groups during the project

30 diarists
4

A formal financial
institution

43

Jewellery

103

Livestock588

transactions$23,780266

by 2 diarists

Accessibility of savings services

But from the successes of SafeSave and Shohoz

As a counterpoint, although it is not one of our

Shonchoy, as well as the popularity of community

countries of operation, we can see a deeply

savings groups in Cambodia, we see that the poor

entrenched culture of saving in formal financial

are eager for easily accessible ways to save.

institutions in Bangladesh, where even verysmall MFIs are permitted to take deposits. In

Gojo Group has been keen to provide clients

January 2023, a team from Gojo visited SafeSave

with opportunities to save since the pandemic

in Dhaka and Shohoz Shonchoy in Hrishipara,in 2020 highlighted the struggles of low-income

two small savings-focused MFIs originallyhouseholds without any savings to fall back on.

established by Gojo’s Outside Director StuartThis includes improving the quality of existing

Rutherford (SafeSave is now run by BRAC). Bothsavings services within the group to make them

SafeSave and Shohoz Shonchoy operate a daily

easier to use and more accessible. This pastcollector model and allow clients to deposit asyear, our Operations team worked with MIFIDA

little as 20 Bangladeshi taka ($0.19) at a time,in Myanmar to reduce the lead time for savings

thus giving clients frequent, easy and convenientwithdrawals from 10 days to 3 days, addressing

opportunities to save. One client said, “I can savea common complaint received from clients. A

while sitting at home. If I had to walk down the

shorter lead time is not currently realistic for MFIs

road to the office to deposit money, I probably

in Myanmar, which try to limit the amount of cash

wouldn’t save every day.” SafeSave and Shohoz

they keep in branches due to security concerns.

Shonchoy’s clients include the very poor, as

MIFIDA also worked to expand their range of

SafeSave’s original branch serves Geneva Camp,

voluntary savings products to include a fixed terma slum housing stateless Biharis in Dhaka. Yet adeposit product and a regular saver scheme.

great many clients save almost every day.
By improving the usefulness and accessibility ofConventional wisdom says that people who areexisting savings services in companies which arevery poor do not have enough money to save.

able to offer voluntary deposits, and by seeking

40 | Gojo Impact ReportStuart, the Gojo team and Shohoz Shonchoy staff
outside their office in Hrishipara, Bangladesh /A Hrishipara resident

innovative ways to enable clients to save in other

Although our data is not perfect due tocountries, we hope to expand our reach beyond

inconsistencies in the way each diarist records

microentrepreneurs to the poor. For an example

their own transactions and we do not have pre-of our product experimentation in this area, readfinancial crisis diary data for comparison, fromabout our Dreams project in Cambodia on page

March 2022 onwards, as prices and political

48.

tensions soared, we saw savings withdrawals
from banks consistently and significantly outstrip

Savings behaviour in a financial crisis: Sri Lanka

savings deposits. This suggests that people were

In contrast to Cambodia, Sri Lanka has historicallydrawing heavily on their savings to cope with loss

had quite a well-established culture of low-incomeof income and rising prices of daily necessities infamilies saving in bank accounts and in piggy

this period.

banks (known locally as savings tills), especially for
their children. This has been encouraged over the

One of our research aims from the beginningyears by banks offering attractive gifts to families,of the project was to observe the impact thatsuch as stationery, games, and even bicycles, forthe provision of free savings tills could have on

achieving savings milestones in their children’ssavings behaviour, inspired by promising results

accounts. From November 2021 to February 2023,

from savings box studies in Kenya11, Malawi12 and20 (1 in 5) diarists conducted a total of 72 savings

India13. We decided to offer diarists two different

transactions with banks.

types of savings boxes — a wooden box with

11 Dupas, P., & Robinson, J. (2012). Why Don’t the Poor Save More? Evidence from Health Savings Experiments. UC Berkeley: Center for
Effective Global Action. Retrieved from https://www.nber.org/system/files/working_papers/w17255/w17255.pdf
12 Aggarwal, S., & Brailovskaya, V., & Robinson, J. (2021). Saving for Multiple Needs: Evidence from Lockboxes and Mobile Money in Malawi.
University of California, Santa Cruz. Retrieved from https://people.ucsc.edu/~jmrtwo/ABRSavingNeeds.pdf
13 Steinert, J., & Satish, R., & Stips, F., & Vollmer, S. (2020). Commitment or Concealment? Impacts and Use of a Portable Saving Device:
Evidence from a Field Experiment in Urban India. Retrieved from: https://www.researchgate.net/publication/341597877_Commitment_or_Concealment_Impacts_and_Use_of_a_Portable_Saving_Device_Evidence_from_a_Field_Experiment_in_Urban_India

Our Clients in Numbers: An Overview | 41

Savings withdrawn and deposited in the Sri Lanka Financial Diaries
200,000

150,000

100,000

50,000In - Savings Withdrawal
Out - Savings Deposited

0
Mar22

Apr- May22
22

Jun22

Jul22

Aug22

Sep22

Oct22

Nov22

Dec22

Jan23

Feb23

a lock and key, and a clay till with a simple rubber

put small amounts of cash for when they would

stopper on the bottom. In October 2022, one year

need to have money on hand. In our diary data,

after the project started, diarists were offered boththe average number of savings till transactions pertill designs and given the opportunity to choose

month increases almost 19 times from November

how many they wanted of each. The wooden till2022 onwards (an average of 17 transactions perproved overwhelmingly popular. Most diarists

month pre-November 2022 to an average of 341

requested at least 2 wooden tills, and one diarist

transactions per month post-November). While therequested 6. The tills were distributed to all diarists

reason for this increase could partly be that thein November 2022.

distribution of savings tills in November served asa reminder to diarists to record in their notebooks

In December 2022, we visited Kesbewa andwhenever they put money in or take money out

Monaragala in Sri Lanka, two of the locations

from their tills, we also believe it demonstratesof the financial diaries project. The diarists toldthat when low-income people are given a

us that even though they were not saving in theconvenient place to store cash, they will makebank, they used the tills frequently as places tofrequent use of it.

The clay till and the wooden till / Gayan Perera

42 | Gojo Impact Report

How Clients Experience
Our Services
In 2022-23, we collected feedback from clientson what clients liked and felt could be improved

through satisfaction surveys conducted by SATYA,

about our services, as well as the extent to which

Ananya and MAXIMA, and 60 Decibels’ (60dB)

clients’ lives improved as a result of our services.

Microfinance Index, which SATYA, MAXIMA,The key similarities and differences between our

MIFIDA, Sejaya and Humo participated in. Theseclient satisfaction surveys and the Microfinanceoffer partly overlapping but different perspectives

Index survey are summarised below:

Client Satisfaction Survey and 60dB MFI Index survey methodology
Gojo’s Client Satisfaction Surveys

60 Decibels Microfinance Index

Scope

Quality of products and customer service;
Client Protection

Quality of products and customer service; Client
Protection; Access to finance; Impact on clients’agency, resilience, business and household

Conducted byGroup company call center and SPM staff

Local research teams

Sample size

Representative sample calculated using asample size calculator (95% confidence leveland 5% margin of error)

275 (90% confidence interval with 5% margin oferror)

Benchmarks

Comparison with previous year’s scores andwith other group companies

Comparison with 120 other MFIs’ average scoresfrom around the world

In addition to asking about client protection anddue to our participation in the 60dB MFI Index.

service quality, the 60dB survey also asks about

loan taken: whether the number and quality of

Performance in relation to MFI Indexbenchmarks

meals eaten has changed; whether their business

Gojo’s group companies underperformed theincome has changed; whether their ability to face

global benchmarks on most measures. The

emergencies and manage their finances hasbenchmarks are averages across the scores ofchanged. A number of these questions are similar

the 120 MFIs participating in the survey, and 60dB

to the questions Gojo typically asks in our impact

has noted that Latin American and African MFIs

surveys about resilience, health, empowerment

tend to have the best scores although they are

and education, but we did not conduct in-house

underrepresented in the sample. Without country-

impact surveys with group companies in 2022-23

level benchmarks, therefore, it is difficult to tellwhat changed in clients’ lives as a result of the

How Clients Experience Our Services | 43

to what extent this underperformance is due toEase of interaction with company

country-specific factors such as saturation of the

On average, 94% of respondents said that it wasmarket, the local level of indebtedness, and local“Very easy” or “Somewhat easy” to interact withregulations governing MFI processes. Certainly inthe five group companies participating in the 60dB

countries like Cambodia, Sri Lanka and Myanmar,

survey. Similarly, an average of 99% of clients

which in recent years have faced either politicalsurveyed by MAXIMA said that “the experienceand economic upheaval or concerns about market

of getting the loan was easy” and “the channel

saturation in their microfinance sectors, it wouldof interaction (branch or digital) is convenient for

not be surprising to find that local companiesme”, and 91% of Ananya’s B2B clients said that

tend to underperform the global MFI Index

they were either very satisfied or satisfied with thebenchmarks.

speed and efficiency of processes relating to theloan application and disbursement.

On the other hand, it is an undeniable fact
that, looking at the benchmarks, Gojo’s group

Quality of customer service

companies have room to improve their impact

95% of respondents to the 60dB survey said thatcompared to MFIs in the rest of the world. We

they strongly agreed or somewhat agreed with theare taking next steps to learn from the results

statement “The [MFI] agents always treat me fairly

by developing action plans together with groupand respectfully.” Although MAXIMA and SATYA

companies and studying the products anddid not include comparable questions about fair

services offered by the top 10 MFIs in the 60

and respectful treatment in their satisfaction

Decibels Microfinance Index to understand how

surveys, 99% and 94% of their respondents

we can better serve clients.

respectively said that they were satisfied with theservices provided by loan officers. This is borne

Satisfactionout by the fact that 19% of clients specifically said

Clients responded positively overall to questionsin the 60dB survey that they would recommend

about their satisfaction with group companies’

MAXIMA because of MAXIMA’s “good loan

services in both our client satisfaction surveys andofficers and branch staff”.

the 60dB survey.

Client Satisfaction Survey Results (xxxx–xxxx)

SATYA

MAXIMA

Ananya

95%

86%

91%

n = 2,600

n = 248n = 33 (the total number ofAnanya’s B2B clients)

44 | Gojo Impact ReportNet Promoter Score14

satisfaction ratings in the 60dB survey typicallyAll group companies surveyed had positive Net

being several points lower than in our in-house

Promoter Scores (NPS) of >0%, and SATYA,

surveys. The gap between 60dB and SATYAMIFIDA and Humo matched or outperformed theresults is within the expected 5% margin of error,

global benchmark of 49%. Ananya in particular

but for MAXIMA, the gap tends to be wider than.

had an excellent NPS of 85% from its B2B client

Despite the overall positive responses aboutsatisfaction survey.

client satisfaction in both surveys, this suggeststhat MAXIMA clients tended to answer differently

Gap between 60dB and in-house satisfaction

depending on whether the questions weresurvey results

being asked by MAXIMA staff or by independent

One surprising finding was the large gap of almost

researchers.

30 percentage points between the NPS fromMAXIMA’s 60dB survey (23%) and their own client

We plan to further investigate the reasons for thissatisfaction survey (52%).

in the next year by conducting an in-house client
satisfaction survey whose questions which will be

In general, we observed several differencesmore closely aligned with the 60dB questions for

between the 60dB survey results and MAXIMA

better comparison, and by speaking with MAXIMA

and SATYA’s client satisfaction survey results

call centre staff to understand their survey

where similar questions were asked, withtechnique.

Net Promoter Score results
100%
85%

75%
62%
58%
52%

51%

50%

33%

25%

60dB Survey NPS

23%Group Company
Client Satisfaction
Survey NPS
Gojo Group Average
60dB Benchmark

0%

MAXIMASATYAMIFIDA

SejayaHumo

Ananya14 Net Promoter Score (NPS) is a metric used to gauge client satisfaction and loyalty to the company. Respondents are asked, “On a scale of 0
(not at all likely) to 10 (extremely likely), how likely is it that you would recommend [company/service name] to a friend?” Respondents whogive scores of 0-6 are categorised as detractors, and those who give scores of 9-10 are considered promoters. NPS is calculated as follows:% promoters - % detractors = NPS

How Clients Experience Our Services | 45

A villager in a delta area of the Ayeyarwady region in Myanmar.
On this day, there was a village festival, so this person is ina good mood, asking me to take a photo of him / Taejun ShinClient Protection

Repayment burden

Repayment burden

Thinking about your loan repayments from [company],
are they a heavy burden, somewhat of a burden, or not a
problem (% answering "Not a problem")?

The extent to which clients felt making repayments
was a burden varied significantly across thegroup. Considering Cambodia’s large average

100%

97%

loan to income ratio and the financial crisis in
Sri Lanka, underperformance against the global

80%

82%

80%

benchmark in this area is not unexpected. Feelingthat a loan creates a repayment burden does notnecessarily mean that the client feels the loan has

60%

56%

less value or utility as a result. Many large loans
in Cambodia are provided for home construction,

47%
40%

and these loans naturally tend to impose a larger
repayment burden on clients because of their20%

non-income generating nature. As we noted in aprevious section of this report, our financial diaries
data suggests that even diarists with large debt

0%

MAXIMA SATYA MIFIDA

SejayaHumo

service ratios value their housing loans despite thesacrifices required.

Score
Gojo Group Average
60dB Benchmark

46 | Gojo Impact ReportData Protection

Data protection

Clients generally scored group companies well

60dB survey question: To what extent do you agree ordisagree with the following statement: “I know what kind ofdata the MFI collects about me and how my data is being
used.” (% answering "Strongly agree" or "Somewhat agree")in terms of their understanding of how their data
was handled, with the exception of Sejaya, where
only 59% of clients said they strongly agreed or

100%

99%

somewhat agreed with the statement.

98%

95%

88%
80%

Resilience81%

Ability to face emergencies
The ability and number of options clients have

60%

59%

to help themselves and their families to copewith an emergency expense are two of the key
metrics Gojo focuses on in our own client centric

40%

framework and impact indicators. The questions
we use to measure this in our own impact surveys

20%

are drawn from the Innovations for Poverty Action
Financial Health Survey Manual15, and are the0%same as the questions asked in the 60dB survey.

MAXIMA SATYA MIFIDA

Sejaya60dB results

Humo
CSS results

Gojo Group Average

Most of Gojo’s group companies either matchedor overperformed the benchmark for this question,

Ability to face emergencies

with the exception of SATYA, which slightly

line with the results from SATYA’s impact survey

60dB survey question: Imagine that tomorrow you have an
unexpected emergency and need to come up with [1/20 of
GNI per capita in local currency] within the next month. How
easy or difficult would it be to come up with this money?

last year, where 21% of respondents said they100%

underperformed the benchmark of 8%. This is in

would find it very difficult to come up with a large
lump sum in one month.

80%

60%

81%

76%

68%

64%
57%

40%

“Very much improved” or “Slightly
improved” thanks to [MFI]20%% answering "Very difficult"11%

Gojo Group Average
60dB Benchmark

0%

8%

0%

7%

MAXIMA SATYA MIFIDA

SejayaHumo

6%

15 https://poverty-action.org/financial-health-survey-manual

How Clients Experience Our Services | 47

A young street seller from Kampong Chamsharing with us her cashflow for her business /Koh Terai

Client-centred
Product Design
Vulnerable and low-income people make the mostof whatever services and resources are available
to them to achieve their goals and manage theirmoney. But this does not mean that the services
available are suitable for them or designed to meettheir needs.

Over the past year, the Studio, an innovation teaminside Gojo which aims to build new products
and services, has been experimenting withdigital financial inclusion, particularly for young
entrepreneurial users with low tech literacy. The
team has developed a product called Dreams,
which innovates both on the financial productas well as with technology. This innovation has
been in collaboration with a grant from Silatech,48 | Gojo Impact Report

A typical example of a Cambodian person using voicemessages to communicate instead of typing / Koh Terai

Users testing the Dreams Telegram Bot on their smartphones / Koh Teraia Qatar-based international, social, non-profit,

Points can later be redeemed and refunded

non-governmental organisation established by Her

towards their future loan repayments.

Highness Sheikha Moza Bint Nasser to connect
youth in the world with the jobs and resources

In addition, the financial product was designed

necessary to establish and develop their projects.

with a large amount of flexibility, to cater to theunpredictable financial lives of low- and lower-

The team landed on creating a credit productmiddle income people. This includes the ability towith a loyalty program, called Dreams. Dreams

easily delay and reschedule repayments, as well

was inspired by Stuart Rutherford’s P9 productas the ability to repay small amounts at any time

which has been implemented in Bangladesh16

providing far more flexibility than the traditional17

and piloted in Kenya . P9 is a hybrid loan product

MFI loan which places emphasis on sticking to awhich allows users to accumulate reserves while

rigid repayment schedule.

having access to credit — directly addressing thechallenges that the poor may have in building

Though our research experiment has been a small

savings.

scale pilot with a limited set of users, our results
have been promising. Our most loyal customers

Dreams is served through Telegram, the leadingused our service over 12 times, and we havemessaging app in Cambodia. This uniqueobserved sophisticated financial behaviours wherecombination of a digital communications channel

users balance meeting their credit and liquidity

with an innovative financial product allows users

needs by accessing loans, as well as building theirto easily get access to credit, while accumulating

reserves by redeeming their Dream Points throughreserves through a loyalty program. Users start

our loyalty program. Our novel product design,with a lower credit amount, and every time they

derived from P9, was able to give people a new

successfully repay, they are able to accumulate

tool to manage their finances.

loyalty points called Dream Points. The Dream

16 https://sites.google.com/site/trackingp9/home
17 https://www.cgap.org/research/publication/jipange-kusave-experiment-in-kenya

Client-centred Product Design | 49

a fully digital experiment, we have observed thekinds of interactions where users are comfortableworking with a machine, while there are othertypes of interactions where people prefer humantouch. We find that we can take these learnings
to improving client experience for our existingproducts and services as well. It opens upquestions such as:• Who are the best kinds of customers to target
through fully online channels?

• Do these new interaction modalities andcommunication channels open up a new set
A screenshot of the Loan confirmation screen of the Dreams
Telegram Bot (in Khmer)

Below are comments from some of our pilot users.

of underserved customers whom we could
serve?

• What kinds of relationships would low-income
households have with their online bankers?

“When I contacted you, you replied to me
instantly... I have someone to communicate withThrough our research pilot, we hope to pivot andto understand [Dreams], so I can trust you.”take our learnings to the next steps. With the— Female Salaried Worker in Phnom Penh (25recent maturation of GPT (generative pre-trained

years old)transformer) technology, the Studio team is now
experimenting with how we can bring these“With Dreams, I do not have to rely on asking forchatbot-based interactions to customer support

money from relatives or family members. Also,

and other parts of the client journey in traditional

I don’t need to go to informal lenders, which

MFI channels.

always have high interest.”— Male Salaried Worker in Phnom Penh (25 years

In our next phase of the project, the team hopes

old)

to focus on building innovative ways to help youth
entrepreneurs connect, learn and share through“Dreams helps me a lot because Dreams

digital technology. This may include creating

understands and cares about me and is flexible.”

online communities where entrepreneurial youth— Female Salaried Worker in Phnom Penh (24can share their knowledge with each other,years old)learn about building businesses, and grow theirfinancial management skills.

This experiment has opened up a whole new setof possible interactions with our clients. Even with50 | Gojo Impact ReportSocial Performance Management
and Client Protection
While Gojo Group works on increasing financial

and Environmental Performance Management

access for clients, we are also well aware of the(USSEPM) by providing information for decision-client protection risks that exist in a businessmaking and embedding social responsibility into

serving vulnerable people. Insisting on robust

the culture of the organisation.

Social Performance Management (SPM) practices

Standards (CPS) is how we safeguard our clients

Social Performance Audits Conducted in
2022-23and ensure they are fairly treated.

The SPI Audit is a tool provided by Cerise+SPTF18

with a strong emphasis on the Client Protection

to help financial institutions measure and manage
Majority-owned group companies are strongly

their social performance.

encouraged to meet Gojo’s requirements of (1)conducting the Social Performance Indicator (SPI)

Gojo has three SPI qualified external auditors,

audit at least once every two years, (2) achieving

enabling Gojo to conduct and supervise high-Client Protection Certification, and (3) conducting

quality social performance audits at group

key SPM activities such as client and employee

companies. In December 2022, Gojo’s CEO,satisfaction surveys, complaints data analysis andTaejun Shin, qualified as an SPI auditor after

social performance training.

conducting an audit with MAXIMA, reaffirming
his commitment to maintaining high standards

SPI audits, which are conducted through a self-

for responsible finance across Gojo. Sejaya andassessment, provide group companies with a

SATYA also completed their SPI4 audits in 2022,

regular opportunity to step back and review theiraccompanied by Haruna Tanaka, another of Gojo’s

own processes and culture to ensure mission

SPI qualified auditors.

alignment, while Client Protection Certification,
which is conducted by social rating agencies such

MAXIMA

as M-CRIL and MicroFinanza Rating, provides

MAXIMA conducted their SPI4 audit between

independent verification of the quality of group

August and November, 2022. With an overall scorecompanies’ services. Key SPM activities such asof 81%, MAXIMA scored higher than the regional

surveys and training help bring companies into

average score of 73% and the global averagealignment with the Universal Standards for Socialscore of 66%.

18 Cerise+SPTF is a joint venture of two nonprofit organisations which are global leaders of social and environmental performance
management in the field of financial inclusion. They developed and manage the Universal Standards for Social and Environmental
Performance Management (USSEPM) and the accompanying assessment tools such as the SPI audit.

Social Performance Management and Client Protection | 51

Our SPI4 audit found that one of MAXIMA’s

resolving complaints, in order to further improvestrengths is the effort they put into understanding

their score in Dimension 4 (Client Protection). In

and serving their clients better. This can be seenlight of this, MAXIMA along with Gojo, in late 2022,

in the way MAXIMA diligently conducts market

developed a more comprehensive complaints

research when designing new products andmechanism and a Complaints Resolution Policy

regular client satisfaction surveys. This has helped

that will be implemented from 2023 onwards.

MAXIMA develop an innovative small digitalloans product, set sustainable growth targets

Similarly, although MAXIMA’s managementthat meet both financial and social goals. Thesedemonstrated strong social commitment throughfactors contributed to MAXIMA’s high scores

regular discussion of SPM matters at the board

in Dimension 3 (Client-Centred Products andand by determining CEO’s compensation in line

Services) and Dimension 6 (Responsible Growthwith social performance, the audit found thatand Returns) in the audit.

MAXIMA can improve in Dimension 2 (Committed
Leadership) by establishing an SPM committee

At the same time, the SPI4 audit highlighted thatthat meets every quarter to monitor and manage

MAXIMA has room to improve their complaints

SPM matters. MAXIMA has therefore set up a newmechanisms, including building awareness of

SPM Committee that is set to meet every quarterclients around complaints mechanisms andthis year onwards and has already conducted theirimproving MAXIMA’s process of receiving andfirst meeting.

MAXIMA’s SPI4 audit dashboard

Global Average 66 %Overall Score

81%

South Asia Average 73 %Client Protection Principles Assessment

Universal Standards Scores by Dimensions

Appropriate Product
Design and Delivery

Define and monitor
social goals
Commitment tosocial goals

100%

76

Mechanisms
for Complaints
Resolution

68

Prevention of
Overindebtedness

80%
60%
40%
20%

Design products thatmeet clients’ needs

0%90Treat clients
responsibly

83

Treat employees
responsibly

85

Balance social andfinancial performance89

Privacy ofClient Data

Fair and Respectful
Treatment of Clients

Transparency

Responsible
Pricing

The institution fully meets the indicator
The institution doesn’t meet all parts of the indicator
The institution doesn’t meet the indicator

52 | Gojo Impact Report

Sejayaincreased from 29% to 52%, mainly due to the

Sejaya conducted their SPI4 audit in Q4 2022, withadoption of the Product Development Policy toan overall score of 61%. Although a significant

ensure products are designed to suit clients’improvement from the 2021 audit score of 50%,

needs.

the score still falls below the global and regional
averages of 66% and 73% respectively.

On the other hand, Sejaya’s score in Dimension
4 (Client Protection) was unchanged from 2021,

The 2022 audit saw an improvement in scoreswith a relatively large gap in client data privacy.

across almost all dimensions, particularly in

To address this, the Data Collection Policy andDimensions 2 and 3. This can be attributed to

Privacy Policy have now been developed as part

policies and processes that were developed andof Sejaya’s ongoing Client Protection Certification

formalised in light of the 2021 SPI4 audit findings.

process. We also noticed that the score for

Sejaya’s score in Dimension 2 (Committed

Dimension 5 (Responsible Human Resource

Leadership) increased from 19% to 54% as Sejaya

Development) needs to be improved. In the mostintroduced SPM reporting in board meetings andrecent employee satisfaction survey, there were

included social performance criteria in their CEO’s

some gaps identified, and the management isperformance evaluation. The score in Dimension

developing action plans to improve employee

3 (Client-Centred Products and Services) alsosatisfaction.

Sejaya’s SPI4 audit dashboard

Global Average 66 %Overall Score

61%

Universal Standards Scores by Dimensions

South Asia Average 73 %Client Protection Principles Assessment
Appropriate Product
Design and Delivery

Define and monitor
social goals
Commitment tosocial goals

67
54

100%

Mechanisms
for Complaints
Resolution

Prevention of
Overindebtedness

80%
60%
40%
20%

Design products thatmeet clients’ needs

0%52Treat clients
responsibly
Treat employees
responsibly
Balance social andfinancial performance

Privacy ofClient Data

Transparency

65
Fair and Respectful
Treatment of Clients

57
69

Responsible
Pricing

The institution fully meets the indicator
The institution doesn’t meet all parts of the indicator
The institution doesn’t meet the indicator

Social Performance Management and Client Protection | 53

SATYA(Responsible Human Resource Development).

SATYA’s SPI4 audit was conducted between
March and November 2022. With an overall score

Although SATYA’s performance is excellent, theof 85%, SATYA demonstrates great commitment toaudit found that SATYA can take further proactive

Social Performance Management.

measures to prevent the risk of mission drift andimprove its governance mechanisms as a fast

Overall, SATYA’s strengths are having a clear social

growing entity, such as discussing mission drift

strategy and social goals, products that fit client

risks at its board and leadership levels to ensureneeds and a high standard for treating clients

preventive mechanisms are in place. The audit also

and employees well. The audit found that SATYA

noted that SATYA could further strengthen its SPM

resolved 97% of complaints received within 3

commitment by conducting a full SPM orientation

months and conducted regular client exit surveys

when new board members join and formalisingand satisfaction surveys, with SATYA’s SPM team

the SPM agenda brought to the board. Most

conducting client interviews and focus groups.

importantly, Gojo’s auditors recommended that

These practices have contributed to SATYA’s score

SPM should formally be included as part of theof 96% in Dimension 4 (Client Protection). The

evaluation criteria for management staff. SATYA

audit also highlighted that employees were happyshould also review the compensation gap between

and proud to work at SATYA and noted that SATYA

the management and loan officers, and try to keep

obtained the Great Place To Work Certification,

it within a reasonable level (20:1) as per the SPM

leading to a score of 94% in Dimension 5

guidelines.

SATYA’s SPI4 audit dashboard

Global Average 66%

Overall Score

85%

South Asia Average 73%

Client Protection Principles Assessment

Universal Standards Scores by Dimensions

Appropriate Product
Design and Delivery

Define and monitor
social goals
Commitment tosocial goals

94
74

100%

Mechanisms
for Complaints
Resolution

Prevention of
Overindebtedness

80%
60%
40%
20%

Design products thatmeet clients’ needs

0%76

Privacy ofClient Data

Treat clients
responsibly

96

Treat employees
responsibly

95

Balance social andfinancial performance81

Fair and Respectful
Treatment of Clients

Transparency

Responsible
Pricing

The institution fully meets the indicator
The institution doesn’t meet all parts of the indicator
The institution doesn’t meet the indicator

54 | Gojo Impact Report

Next steps for 2023-24

The living situation of our clients and staff of

In addition to carrying out the social performance

MIFIDA in Myanmar continues to be affected due toaction plans agreed upon with MAXIMA, Sejaya

the ongoing political unrest. Last year, the villages

and SATYA, in the next year Gojo plans to conductof some of our clients in Sagaing were burnt down.

SPI5 audits of Humo, MIFIDA, Prayas (Ananya’s

As of February 2023, in light of violent clashes

subsidiary) and MAXIMA.

continuing in 4 states in Myanmar and giventhat Myanmar is still under a state of emergency,

Client Protection

Gojo together with MIFIDA decided to close all

Certification

branches in conflict areas to reduce the risk to

We believe that implementing the Client Protection

the lives of our employees and clients. InternalStandards defined by Cerise+SPTF is essential todisplacement and the loss of livelihoods resulting

operating sustainable businesses for vulnerablefrom unpredictability and decreases in tourism havepeople. Gojo requires group companies tonaturally also had a negative effect on MIFIDA’s

undertake third-party assessment in order toportfolio quality.

achieve Client Protection Certification (CPC).
Of the 5 MFIs majority-owned by Gojo, 4 are

In the past year, MIFIDA has worked to recover

either certified or are making progress towards

overdue payments wherever possible in a

obtaining certification. MIFIDA and MAXIMA are

respectful and transparent manner while making

both currently certified, and Sejaya has completed

allowances for each client’s situation. It is worth

their CPP audit and is now awaiting certification.

noting that despite the deterioration of portfolio

MAXIMA plans to renew their certification in 2023,

quality in Myanmar and the accompanying risks

and SATYA will begin their certification process inof aggressive or abusive collections, MIFIDA

mid-2023.

performed excellently on the Client Protection
portion of the 60dB survey, outperforming almost
all benchmarks. 99% of clients said “No, never”
when asked if they ever experienced unexpected
fees, and 99% of clients surveyed also said they had
never been pressured by the staff to sell something
they did not want in order to make a repayment.
Kaung Set Lin, the Chief Quality Officer at MIFIDA,
who is leading their debt recovery process, says,“We believe that by maintaining transparency andClient Protection Risks

taking each client’s situation into account during

As Gojo continues to prioritise client protection,delinquency recovery, we are respecting the Client

we also want to make a note of the current risks

Protection Standards and building trust and loyalty

to client protection owing to country and market

with our clients. Therefore, while it may sometimes

situations, particularly for MIFIDA in Myanmar,

impact our business performance, we prioritise

Sejaya in Sri Lanka and MAXIMA in Cambodia.

doing what is right for our clients and ensuring theirprotection throughout recovery.”Social Performance Management and Client Protection | 55

Sri Lanka, in 2022, faced an economic crisis

July 2022, coming to rest at around 65% by theleading to shortages of essential goods suchend of the year. Diarists also reported that they

as food, medicine, petrol and diesel, increased

had reduced the number of times they cooked per

power cuts and soaring prices. By June 2022, theday to cope with rising fuel and food costs. The

National Consumer Price Index (NCPI) in Sri Lanka

increased burden on clients’ household finances

was almost 40% higher than in January 2022, andnaturally also led to a deterioration in portfolio

participants in our financial diaries project told

quality and an increase in overdue loan payments,

us that the cost of utilities had doubled or evencompounded by the fact that staff found it difficult

tripled. From our financial diaries data, we saw theto reach clients for collections due to the state ofratio of food expenses to income increase fromemergency in the country and a lack of fuel.

around 53% in January 2022 to a high of 70% in

Food-Expense Ratio in the Sri Lanka Financial Diaries
75%

5,000,000
4,500,000

70%

4,000,000
3,500,000

65%

3,000,000
2,500,000

60%

2,000,000
1,500,000

50%

1,000,000

All expenses
500,000
0

Food
45%
Jan22

Feb- Mar- Apr- May- Jun22
22
22
22
22

Jul22

Ratio

Aug- Sep- Oct- Nov- Dec22
22
22
22
22

In a survey conducted with financial diarists during

the beneficiaries in coordination with the Ministry

the months of June and July, diarists consistentlyof Health, and also partnered with Cargills, a large

told us that food expenses were their single

supermarket chain, to issue rs. 5,000 worth oflargest source of stress. Concerned about thevouchers which could be used for food and daily

impact of food costs on vulnerable populations,necessities to each beneficiary. Sejaya branch

particularly on pregnant women, Sejaya partnered

managers were directly in charge of issuing andwith the Gojo Foundation in an initiative called thehanding over the vouchers to the beneficiaries.

Sri Lanka Food Security Fund, using its branch

Sejaya also conducted an impact survey to

network to distribute food vouchers to pregnant

understand how the vouchers were being used.

women and their families. Gojo Foundation raised

They interviewed about 100 beneficiaries acrossabout 15 million JPY to support this initiative,

different branches. A further description of thismainly from Japanese donors. Sejaya identified

initiative can be found on page 64.

56 | Gojo Impact ReportWhile MIFIDA and Sejaya have dealt withspecial attention to client protection in MAXIMA

the impact of political and macroeconomic

given the potential risks in the Cambodian market.

turbulence, MAXIMA’s challenge has been the

It was for this reason that MAXIMA’s SPI4 audit

increasing concern from local NGOs as well as

was conducted by Gojo’s CEO Taejun. We haveinternational investors about overindebtedness inalso monitored the situation closely throughCambodia. Estimates of the average microfinanceweekly calls with MAXIMA’s SPM team, monthly

loan size in Cambodia range from $3,800 tobusiness review meetings with MAXIMA’s senior$4,300 — significantly larger than the GNI per

management and analysis of our financial

capita of $1,540 and the average loan size of

diaries data.

<$500 in other developing countries. In addition,
despite the National Bank of Cambodia’s

Sharing and promoting best practices

stipulation that no borrower should have moreGroup SPM Leads Conference

than 2 loans at a time, there are many private

We held a virtual conference with all SPM leadsmoneylenders whose loans are not reported tofrom across Gojo Group in December 2022. Since

the credit bureau, enabling multiple borrowing.

each group company typically has just one or two

Over the past year, headlines such as “TheSPM leads, SPM leads sometimes feel a sense of

microfinance debt crisis that is crushingisolation as well as heavy responsibility for being

Cambodia” and “Big money backs tiny loans

the subject matter experts in their companies.

that lead to debt, despair and even suicide” have

By bringing SPM leads together, we wanted tocome to dominate the narrative surrounding

provide an opportunity to share experiences

Cambodian microfinance in international media.

and knowledge across different companies and

LICADHO, a local NGO, has documented stories of

discuss common issues faced.

overindebted borrowers who have been harassed
and who have had their collateral unfairly and

SPM leads discussed Gojo Group’s overall impact

aggressively seized by MFI agents.

and SPM strategy, heard from SATYA about theresults of their recent Impact Assessment Survey,

In this context, MAXIMA has implemented

and discussed challenges faced in embedding

a strict credit policy to avoid overindebting

client protection and SPM in their respective

clients. In addition to conducting the standard

companies’ processes and policies. We used thecredit bureau checks and ensuring that they doconcerns and suggestions shared in discussions

not lend to clients with 2 or more outstanding

to help formulate our plan and priorities for SPM

loans, MAXIMA also implements a conservativeand impact in the upcoming financial year.

repayment capacity assessment for all clients inwhich they apply risk discounts to clients’ statedStandardising the Client Satisfaction Survey

income, do not consider additional business

Following a workshop conducted by Cerise forcash flows expected from clients’ investment of

all Group SPM leads in May 2021, where wetheir prospective loans, and make loan approval

discussed practical and methodological issues

decisions based on a client’s net income including

with existing client satisfaction surveys, we

all existing debt obligations. Gojo has also paid

developed a best practice survey manual, script

Social Performance Management and Client Protection | 57

and questionnaire in September 2021 to bewere receiving fewer complaints than expected,

shared among the whole group. In February 2023,

we collaborated with MIFIDA, Sejaya andwe updated the survey questionnaire and manual

MAXIMA in late 2022 to develop a comprehensive

based on lessons learned from the previous roundcomplaints mechanism to be implementedof surveys.

together with an integrated call centre andCustomer Relationship Management (CRM)

The survey now comprises 12 main questions tosystem.

understand client satisfaction with the products,
services and their overall experience of engaging

Our first step was to develop a detailed Clientwith the financial institution. In writing theComplaint Resolution Policy template describing

questionnaire and script, we took care to keep

the responsibilities of employees at various stages

the survey simple and easy to understand, keepof the complaint handling process, mechanisms toquestions neutral, and draw from other existing

inform clients of complaints channels, processes

best practice survey instruments such as thefor logging, assessing and resolving complaints

Innovations for Poverty Action Financial Healthas well as processes for reviewing and analysing

Survey Manual and the 60 Decibels Microfinancecomplaints to improve products and services.

Index, for the purposes of comparability.
We first piloted the implementation of the
Our survey manual includes guidance on piloting

policy with MIFIDA. In December 2022, MIFIDA

the survey, sampling, calculating a consolidated

organised a day-long training session for its callsatisfaction score and analysing and reporting

centre staff to help them discuss and understandresults. This ensures a minimum level of quality inthe new complaints mechanism. Gojo andclient satisfaction survey results and enables us to

MIFIDA’s SPM Leads worked together on thecompare satisfaction scores across companies.

training material, which included interactive
quizzes and roleplay scenarios to help reinforce

Development of new complaints mechanism

learning. We have shared the training material

with MIFIDA, Sejaya and MAXIMA

with MAXIMA and Sejaya and will be supporting

A good complaints mechanism should encouragethem in the implementation of the new complaints

spontaneous feedback from clients and help

mechanism as well.

to identify operational issues. In response toconcerns from some group companies that they

58 | Gojo Impact ReportGojo members taking a photo together in Tokyo /Taejun Shin

PeopleAs Gojo has grown, the number of employees

employee wellbeing by valuing diversity andacross the group has also significantly increased

creating an enjoyable work environment wherein the past few years, with 9,500 employees

everyone can feel motivated to achieve our goals.

in Gojo Group as of end March 2023. In the

In order to understand and improve our impact

business of financial inclusion, which is built on

on employees, we have collected data on various

frequent face-to-face interactions with clients,

indicators which help us to measure diversity andthe wellbeing of employees affects the quality

satisfaction across the group.

of service provided to clients. We aim to improve

Number of Employees in Gojo Group

9,500# of employees

7,657

5,275
3,501

499
2018

1,906

2019

2020

2021

2022

2023

People | 59

Nurturing a diverse workforce
Nationalities

China 1

France 1

Taiwan 1

Germany 1
Poland 1

Japan 12

Azerbaijan 1
Stateless 1

Philippines 1
Total 36
members

Singapore 1
Myanmar 1
India 14

Gender19
Non-management
Members

11

Management

6

2
Board
5

FemaleMale

Building a diverse team

In terms of gender, 2 out of 7 of Gojo’s directors

Diversity has been a key value for Gojo fromas of March 2023 are women. The percentage ofthe beginning. At the holding company level,

women members in Gojo has slightly decreased

11 nationalities are represented among our 36

to 31% from last year (33%). Due to the departure

members, with Indian members making up theof women in senior management last year,

single largest group. While Gojo originally started

Gojo’s 6-member Executive Committee is now

with a majority of Japanese members, we haveentirely composed of men. This has resulted inundergone a natural shift toward increasing hiringa concerning gender imbalance in Gojo’s seniorfrom India as the majority of our clients are also

management, which we are working to remedy.

based there.

60 | Gojo Impact ReportAcross Gojo Group as a whole, women makebrings together team members spread acrossup 14% of staff. The primary reason for this ismany countries to enjoy playing games together

that in some countries such as India and Sri

online, while another initiative, called Power ofLanka, loan officers, who make up the majority

One, aims to spotlight members’ personal stories

of our employees, tend to be men. However,of life-changing experiences. In addition, in June

37% of senior managers in group companies arethis year, all Gojo members will gather in Tokyo forwomen, and in each company there are women ina week of team-building and strategy discussions,influential management positions.

our first in-person offsite since the pandemic.

Providing an enjoyable workplace

Sharing best practices across the GroupIn Gojo’s member satisfaction survey conductedWith the ebb of the Covid-19 pandemic and thein the last fiscal year, members responded veryeasing of travel restrictions, we have been working

positively to the statements “I enjoy working withto increase opportunities for managers in group

Gojo members” and “I am given enough autonomy

companies to meet in person and share their

to decide how to do my work”. In addition, thisexperience. In October 2022, we held an offsite

year’s survey saw significant improvements on

for group CEOs in India, followed by an offsite forthe scores for “Gojo as a company is acting on its

CFOs and group finance executives in Tokyo in

Guiding Principles and Values” and “I have been

December. These events provided opportunities

able to maintain the work-life balance I want”

for group company managers to exchange views,

compared to last year. However, satisfaction

strengthen collaboration with each other, andwith the level of collaboration across teams andbuild understanding of Gojo’s long-term strategy

departments remained low, resulting in a lower

and a sense of unity across the Group.

overall satisfaction score than in last year’s survey.
Gojo’s Human Resources team has also worked
To help Gojo members get to know each otheron best practice resources for the entire group,

better and develop a stronger sense of team, we

including a standardised Whistleblowing Policy

have been increasing the number of opportunities

and a formalised Code of Conduct to be followed

for team members to interact with each other,across the group.

both online and offline. Our Fun@Work initiative

Gojo Group employee satisfaction survey

Gojo

MAXIMA

Ananya

71%

79%

83%

People | 61

A MAXIMA customer who raises cows. Despite the impact
on the environment, buying cows and buffalos continues
to be one of the most popular uses of loans /Taejun Shin

Environment
A greener path forward

Our Environmental Policy and Roadmap

In order to continue serving our clients well in theconsist of three focus areas: (1) calculating andlong term, Gojo needs to ensure that we protect

monitoring our GHG (greenhouse gas) emissions,our clients from environmental risks and minimise(2) including environmental considerations

our negative impact on the environment. We doin our pre-and post-investment processes,

so by establishing environmentally responsible

such as incorporating the IFC exclusion list

operations and products, by setting minimum

and the ALINUS Green Index19 into our due

requirements for Gojo and the group companies

diligence process, and (3) offering more green

in our Environmental Policy, and by creating an

finance products and services to our clients toEnvironmental Roadmap which sets out our

support climate adaptation and environmentallycommitments and the timeline for achieving them.

sustainable development.

Our Board of Directors approved our proposed
Environmental Policy in March 2023, representing

Quantifying our environmental impact

a key milestone in Gojo’s journey towards

One of the key steps in the Environmental

environmental sustainability.

Roadmap is to measure and monitor the Group’s

19 ALINUS is a tool developed by Cerise+SPTF supporting robust social and environmental investor due diligence. The Green Index is one ofthe dimensions in the ALINUS questionnaire, and focuses on a company’s environmental monitoring processes and green finance productoffering.

62 | Gojo Impact Report

GHG emissions. Ananya has already taken

as well as the ICAO Carbon Emissions Calculator.

strides in this direction, calculating their carbon

The CO2 emission coefficients used are 0.447

emissions based on resource consumption and

kg-CO2/kWh and 0.376 kg-CO2/m3 for electricity

business travel. Gojo has also created our own

and water usage, respectively. We intend to further

GHG emissions calculation tool for calculating thepilot this calculation tool with selected groupholding company's emissions, adapted from thecompanies in the coming year. The baseline data

UNFCCC Greenhouse Gas Emissions Calculator,

collected will be used to set Gojo Group’s future

US EPA Greenhouse Gas Equivalencies Calculator

emissions targets.

GHG emissions

Emissions from businesstravel of Gojo members via air

Emissions from electricity forTokyo office

69,134 kg CO2

4,000 kg CO2

Mindful lending with environmental risk

than 4,000,000 MMK as part of their loan

assessments

application process. They also formalised their use

As part of our focus area on incorporatingof the IFC Exclusion List in their Environmental

environmental considerations into the pre- andPolicy to guide them in screening loan applications

post-investment process, Gojo will encouragefor certain business activities. Furthermore,group companies to incorporate environmental

MIFIDA also actively monitors the environmental

risk assessments into their loan appraisal

performance of their loan portfolio by performing

process. In the coming year, we will work on

regular E&S (environmental and social) audits increating an assessment framework which caneach of their branches.

be applied across a wide variety of geographiesand occupations. The framework will aim to

MIFIDA has already begun implementing

identify potential negative environmental impact

environmental risk assessments as part of theassociated with a loan and encourage our clientsloan application process, categorising businessto adopt environmentally responsible businessactivities into different groups based on theirpractices, especially for those with businessenvironmental risk. They also established theiractivities assessed as high-risk.

own Exclusion List to guide them in rejecting
loan applications for certain business activities.

MIFIDA has already begun implementing

Furthermore, MIFIDA also actively monitors theenvironmental risk assessments of loans larger

environmental performance of their loan portfolio.

Environment | 63

Community

Local communities in operating countries

and collaborating with and providing feedback

Through Gojo’s financial diaries project in Srito government agencies. Gojo actively shares

Lanka, we found that peoples’ lives deteriorated

information about our impact measurement

rapidly starting from around May 2022 due to themethodology and fundraising strategies withnational financial crisis. We saw that it became

fellow impact startups in order to contribute to thisdifficult for diarists to access even the minimum

community.

quantity of food they needed due to a sharp drop
in income and soaring prices. In response to this,Our global community of practitioners andGojo Foundation started a Food Security Fundinvestors

programme in June 2022. Through this programme,

This past year, as the world began to return toGojo Foundation was able to provide LKR 5,000

normal post-pandemic, we had the opportunity toworth of food vouchers which could be redeemedinteract more with other practitioners, researchers

at a large supermarket chain in Sri Lanka to

and investors in the social impact and financial

7,436 pregnant women across the country. The

inclusion sectors, both in person and online.

financial diaries project helped Gojo Foundation tounderstand the situation quickly, enabling swift andtimely action.

• Cerise+SPTF annual gathering, Paris,
September 2022: Gojo’s impact measurement
and SPM lead Cheriel Neo gave a presentation

Our community in Japanin the Outcomes Working Group session on

Although Gojo’s business operations mostly take

Gojo’s approach to measuring outcomes,

place overseas, we also value being an active

including our financial diaries work. It waspart of our community in Japan. This year Gojo

encouraging to share experiences andbecame a founding member of Japan’s Impact

exchange ideas with other impact-focused

Startup Association, which launched in Octobermicrofinance investors who have been

2022. The Impact Startup Association is a group ofgrappling with similar questions of how tostartups which see social issues as opportunities

measure impact and better understand ourfor growth. The Association aims to contributeclients. We were inspired by hearing about

to the realisation of a more sustainable society

the data systems other practitioners have set

by supporting the development of social impact

up to capture information about their clients

startups in Japan through sharing information

and by seeing the commitment of ecosystem

on topics such as impact measurement andorganisations to making Client Protection andvisualisation, developing the startup ecosystem

Social Performance an industy standard.

64 | Gojo Impact Report• Dvara-CGAP conference, Chennai, February• Impact-Weighted Accounts: We conducted

2023: We participated in the conference,a pilot study of impact accounting for ourwhich involved two days of discussion

microfinance group company, SATYA

with key Indian ecosystem players andMicroCapital Ltd, in collaboration with theresearchers from CGAP, focusing on theInternational Foundation for Valuing Impacts

prevention, identification and alleviation of(formerly the Impact-Weighted Accounts

overindebtedness. We were able to shareproject at Harvard Business School), a non-insights from our financial diaries as well

profit research organisation that develops

as from our field visit to Bangladesh. The

methodologies for impact accounting. The

discussions at the conference helped sharpen

pilot aimed to calculate the net impact ofour focus in the coming year on increasing our

SATYA in dollar terms on its clients, who are

visibility of debt recovery practices and related

typically women in underserved rural areas.

risks at group companies.

Data was collected through core banking
system data and surveys, and the Impact-• Webinars: We conducted 5 webinars in

Weighted Accounts framework was used to2022-23 both in English and Japanese,

categorise potential impacts. We found thatreaching audiences in Asia, Europe and thethe microfinance loans provided by SATYA had

US. Webinar topics included our 2022 impact

a significant positive impact on the income ofresults, a fireside chat with the CEO of Humo

underserved women in rural areas, equivalent

about the Ukraine crisis, and a presentationin dollar terms to 19.45% of SATYA’s 2021-

on the financial crisis in Sri Lanka and Gojo

2022 revenue.

Foundation’s Food Security Fund.

Community | 65

Investors

Innovative ways of raising funds

Support for Group company debt financing

For inclusive financial service providers in low-

While Gojo primarily encourages group companies

and middle- income countries, one of the major

to raise deposits wherever possible, encouraging

challenges is the high cost of funding. Establishingclients to save as well as bringing in a more stablea sustainable mechanism to channel funds fromsource of funding for MFIs, we also leverage thedeveloped countries such as the US, Europe andcapital market to offer debt instruments to Group

Japan to people who need access to affordable

companies to help accelerate their growth whenfinancial services in emerging countries is one

necessary. This can include intercompany loansof the most important roles played by Gojo as

and numerous types of credit guarantees. Over thea holding company. To facilitate this, Gojo has

course of this year:

developed innovative ways to raise funds, as
outlined below.

• Comfort letters and credit guarantees
were extended either to first time lenders

Equity fundraisingor lenders who required more assurance

As of March 2023, our cumulative Series E

given complicated country situations; thesefinancing amount reached USD $80 million, andsupported Group companies to secure debt

paid-in capital since our establishment in July 2014

from third party lenders under a worldwide

has now reached USD $193 million. We believe

economy still impacted by the COVID-19

that our track record reflects investors’ confidence

pandemic;

in Gojo’s ability to achieve a double bottom line,
seeking both financial sustainability and positive• A total equivalent of USD 14.7 million wassocial impact through financial inclusion. Gojo has

provided as inter-company loans to groupbeen raising funds from Japanese and international

companies at preferential rates including inter-

investors, particularly including individuals

company loans to SATYA and Ananya throughand institutions aligned with our mission, and

Non-Convertible Bonds, enabled by Gojo’schannelling those funds into Group companies toregistration a Foreign Portfolio Investor by

expand their reach and strengthen their impact. We

Securities and Exchange Board of India.

are committed to meeting the expectations of ourinvestors by further extending financial inclusion

Gojo continues to work on optimising funding

through robust partnerships with our Group

cost and diversifying sources of funds by pursuing

companies.

global scale and risk diversification.

66 | Gojo Impact Report

A SATYA client who used her loan to buy buffalos /Taejun Shin

So far, Gojo has benefitted from the strong support

thrived and turned into strategic partnerships,of Japanese social lenders. We now work notsecuring a larger committed amount to support

only on building relationships with both Japanese

Gojo Group’s rapid growth.

and international financial institutions including
conventional loans, standby letters of credit

Finally, as a holding company, Gojo also took

(SBLCs), etc. but also with individual investors

steps to strengthen its treasury function including

through various channels including bond issuancethe implementation of hedging options andand online platform.

liquidity management for Gojo as well as Group
companies.

Gojo has also been working closely with
Development Finance Institutions (DFIs),

By building strong relationships with investors, weMicrofinance Investment Vehicles (MIVs) andare also able to strengthen our relationships withother international impact lenders who play anGroup companies. Together, we make progressinvaluable role in developing financial markets andtowards greater financial inclusion for everyone.

supporting financial service providers which serve
low-income markets. These relationships have

Investors | 67

Our Governance Framework
Gojo considers corporate governance theThis year, we have appointed Ignacio Mas-Ribofoundation which will enable us to achieve

as a new Outside Director who is an expert inour vision, mission, and 2030 goal, while

financial inclusion and digital finance. Stuart

carefully monitoring the implementation of

Rutherford, who has served as an Outside Director

our management principles and five values,for 3 years, will retire from Gojo’s board in June

collectively known as the Guiding Principles.

2023. Mangyo Kinoshita, who has served as an

Therefore, since our establishment, Gojo has

Outside Auditor for 5.5 years and Outside

adopted additional efforts beyond the statutory

Director for 1 year, will retire from Gojo’s board inrequirements of the Japanese Companies Act.

June 2023.

We are committed to continuing our pursuit of thehighest standards of corporate governance.

Corporate Governance System (as of 31st March 2023)

Type of system

Three Board Committees:• Nomination Committee• Remuneration Committee• Audit Committee

Number of Directors

7 (6 of whom are Outside Directors)

Number of Executive Officers

2 (CEO, Managing Partner)

Term of office for all Directors

1 yearManagement Committees

Gojo has 2 internal Management Committees:• Executive Committee deliberates on company-wide management policy
and important issues• Investment Committee deliberates on new and additional investment
decisions for partner companies

Advisory committees tothe Board of Directors

The Impact Committee is established to assist the board such that it
always takes into account clients and other stakeholders’ interests in Gojo’s
decision making.

Independent external auditor

Deloitte Touche Tohmatsu LLC

68 | Gojo Impact ReportOverview of Gojo’s Corporate Governance and Internal Control System

General Meeting of Shareholders

Directors’ nominationand dismissal

Investment
decision

Supervision

Board

Management

Board of Directors

Nomination
Committee

Investment
Committee

Chair / CEO
Remuneration& Talent
Committee

CEO
MP*

Group
Companies

OutsideDirectors
Audit
Committee

Appointment
and dismissal

AdviceExecutive
Committee

ReportSupervision

Audit

Supervision

ReportAdviceAdviceImpact Committee

Accounting Auditor

Collaboration

Gojo’s Internal
AuditGroup Company’s
Internal Audit
Collaboration

Director & Executive Officer
Outside Director*MP = Managing Partner

Our Governance Framework | 69

Overview of Internal Audit

Based on its findings, Internal Audit recommends

Gojo’s Internal Audit function provides assurancechanges to improve processes and follows up on

by assessing and reporting on the effectivenesstheir implementation.

of governance, risk management, and control
processes designed to help the organisation

Internal Audit focuses heavily on the Client

achieve strategic, operational, financial, andProtection Standards as well as client complaints

compliance objectives.

and feedback. The Internal Audit team provides
recommendations to respective business units

By maintaining its independence, Internal Audit

for implementation of robust procedures to

can perform its assessments objectively, providing

enhance customer service and client satisfaction.

the board, management and all other stakeholders

This provides credibility and confidence to theinformed and unbiased critique of governancestakeholders including clients, potential investors

processes, risk management, and internal control.

and employees.

Board and Committee Composition (as of March 2023)
Name & Role

Year ofthe first
appointment

Attendance Independentof Board
Meetings in
FY2022—

Committee Composition
Audit

Nomination Remuneration
and Talent

Taejun ShinFounder & CEO
Board Chair

2014

20/20

—

Mangyo Kinoshita
Outside Director
Remuneration andTalent Committee Chair

2015*

19/20

Masahiro Kotosaka
Outside Director
Audit Committee Chair

2018

20/20

Stuart Rutherford
Outside Director
Impact Committee Chair

2019

20/20

Royanne Doi
Outside Director
Nomination
Committee Chair

2021

20/20

Milena Nikolova
Outside Director

2022

17/20

—

—

Ignacio Mas-Ribo
Outside Director

2023

1/1**

—

—

ImpactObserver———Observer: Member: Chair* Mangyo Kinoshita served as Gojo’s Statutory Auditor between June 2015 and Feb 2021.
** The appointment of Ignacio Mas-Ribo took place in March 2023, and he attended his first official board meeting as a board member inMarch 2023.

70 | Gojo Impact Report

Board evaluationcompany management - whether to continue theIn line with corporate governance best practices,

current “hands-off” approach so as not to hinder

Gojo conducted our second annual board andgrowth, or to take a more critical stance andcommittee self-evaluation in March 2023. Like lastchallenge the management more. As Gojo aims

year, we first circulated the survey questions to all

to go public in the coming years, the board may

board members, followed by interview sessions

need to shift from the former style to the latter, andwith each of them. The overall score for the board

the transition including the board compositionof directors was 3.2 out of 4, which was almost theneeds to be thought through. The board agreed tosame as last year (3.3). The board feels that overall

consider and discuss the role of the board at eachprogress has been made and that they are a goodstage of the company in our monthly Nomination

team. Having said that, there are two different

Committee meeting.

views on how the board should interact with theResults of Gojo’s second board self-evaluation survey

Overall Score: 3.2 (vs 3.3 FY22/03)
Board of Directors(n=7)

Section I: Decision Making
and Monitoring
3.2
4.0

3.0

2.0

Section V: Duties
and Liabilities
3.4

1.0

Section II: Board
Composition
3.2

0.0

Section IV: Working
Procedures
3.1

Section III: Committees
and Frameworks
3.2

Our Governance Framework | 71

Closing Remarks from the Chair of
the Impact Committee
Stuart Rutherford, our Impact Committee chair, isbusinesses and cause them to grow rapidly,retiring after more than four years as an Outside

and that their clients were too poor to save. All

Director. Here, he shows how research into thethree assumptions proved false. Not everyone

lives of their clients is critical to good performance

has the desire, or the time, or the courage, to run

by microfinance institutions.

a business, especially if they are already busy
working as a labourer or a domestic servant or the

The theme of this year’s Impact Report –like. Besides, poor households have many other‘understanding our clients’ – is dear to my heart.

needs for money besides businesses, such as

As an architectural student in 1974 I had adealing with health emergencies, educating theirresearch job in Nicaragua looking into how poor

children, and improving their homes. Most lookpeople’s homes had survived the earthquake

for ways to create these sums of money throughthat had destroyed the capital, Managua. My

saving as well as through borrowing.

unforgettable conversations with families in thecity’s poorest areas gave me my life’s hobby –Grameen learned of its mistakes the hard way.

finding out how poor people manage their money.

Assuming that growing businesses would giveclients bigger incomes, and enable them to repay

A few years later modern microfinance was bornever bigger loans, Grameen increased the valuein Bangladesh and Bolivia, then two of the poorestof the loans each year. That worked as long as

countries in the world. I moved to Bangladesh

everyone could make the weekly repayments, but

and began exploring the fit between microfinanceinevitably those whose incomes were not growing

and its clients in Asia and Africa. I found thateventually had problems repaying. One by one

microfinance providers get into trouble if they

they stopped paying or paid only at great personal

rely on stereotypical assumptions about the poor

cost and stress. Grameen came close to collapse.

and do much better when they take the trouble tounderstand their clients’ lives.

It was rescued by its modest research team, who
had been conducting small-scale trials of savings

The first and most famous MFI, Grameen Bank

products. Grameen rebranded itself as ‘Grameenof Bangladesh, provides a good example. TheyII’, changed the way it issued loans, and launchedassumed when they started that all their clientsnew savings products, including a long-term

were able and willing to run a small business,‘commitment’ saving plan in which clients savedthat Grameen loans would be invested in thoseregularly for a five- or ten-year term during which

72 | Gojo Impact Reportthey could borrow against their savings, and thenautomatically benefit from microfinance loans. To

took back their savings with generous interest.

discover what can happen when a microfinance

It was immensely popular. Within a few years

loan enters a poor household, Gojo has run two

Grameen’s savings portfolio was bigger than its

Financial Diary projects (in Cambodia and Sriloan portfolio. It never again had to seek funds for

Lanka), and to test hunches about what might

its loans.

work best for a broad range of poorer clients Gojo
has piloted a pair of experimental products inBank Rakyat Indonesia (BRI), a grand old colonial-

Cambodia. The qualitative information gleaned

era Bank, by contrast, benefited from extensivefrom these activities has enabled this Report toclient research before settling on its microfinanceavoid conventional ‘happy ending’ stories about

products. In the early 1980s its researchers spentclients in favour of more realistic presentations

years talking to poor households about how theyof their lives, and has given Gojo the opportunity

manage their money, and persuaded the Bank

to engage with and contribute papers to theto refocus its rural outlets on saving. The savings

international discussion about client-centric

schemes reproduced as far as possible themicrofinance.

convenience, flexibility, and simplicity that villagers
traditionally sought when they saved money with

The poor are among the hardest clients for‘money guards’ – older relatives, friends andmicrofinance to reach, and in the twenty-first

employers who could be trusted to keep theircentury microfinance has treated them as lessmoney safe. BRI launched the scheme in the earlyof a priority, something which is reflected in the

1990s and by 1996 14 million accounts had been

income data in this Report. But by researching

opened, worth $US 2.6 billion.

the rhythms of their financial lives, we can find theclues we need to develop and deliver the products

Gojo has taken note of these experiences andthat best suit poorer clients. It is a field in which

does not assume that if someone is a woman and

Gojo can become a world leader.

lives in a village in the developing world, she will

Closing Remarks from the Chair of the Impact Committee | 73

Abbreviations

MFI = Microfinance Institution

ALINUS = ALigning INvestors due-diligence and

PPP = Purchasing Power Parity

reporting with the Universal Standards

PAR = Portfolio At Risk

CPC = Client Protection Certification

RBI = Reserve Bank of India

CPS = Client Protection Standards

ROSCA = Rotating Savings and Credit Association

GHG = Greenhouse Gas

SPI = Social Performance Indicators

GRI = Global Reporting Initiative

SPM = Social Performance Management

NBFC-MFI = Non-Banking Finance Company -USSEPM = Universal Standards of Social andMicrofinance Institution

Environmental Performance Management

Data Points Presented in this Reportmicrofinance industry standard by researching

The data mapping process for this year’s

how other MFIs conducted their own data

Impact Report involved creating a list of all

mapping. A few of the indicators Gojo uses could

impact indicators for each stakeholder and their

not be matched to any GRI disclosure numbers.

corresponding location in the report. We thenmapped the indicators to their relevant SDG
goals and GRI disclosure numbers, following the

Stakeholder

Gojo’s Impact Indicators

Page No.

SDG Target

GRI Disclosure

Clients

AUM

14

1 / 8 / 10

201-1

Clients

Disbursements

14

1 / 8 / 10

201-1

Clients

Total no. of clients14

1 / 8 / 10

201-1

Clients

Female clients as percentage of total clients14

1 / 5 / 10

203-2

Clients

Rural clients as a percentage of total clients14

1 / 10203-2

Clients

PAR30

14

1

203-1

Clients

No. of clients living under 5.5 USD / day

28

1 / 10203-2

Clients

Total no. of loan / remittance clients

26

1

203-2

Clients

Total no. of savings clients

26

1

203-2

Clients

Voluntary savings clients as percentage of
total savings clients

26

1

203-2

Clients

Clients accessing finance for the first time aspercentage of total clients

26

1

203-2

Clients

Breakdown of clients’ income sources /occupations

27

1/8

203-2

Stakeholder

Gojo’s Impact Indicators

Page No.

SDG Target

Clients

No. of clients per loan product30

1 / 6 / 7 / 8 / 10 203-2

Clients

Breakdown of loan usage purposes

30

1/8

Clients

Average USD of voluntary savings per client

39

1

Clients

Average USD of compulsory savings perclient39

1

Clients

Client satisfaction survey results

44

1 / 10102-43

Clients

60dB survey results

44

1 / 10102-43

Clients

SPI4 audit results

51

1 / 10102-43PeopleNo. of Gojo Group employees per year

59

16

401-1

PeopleFemale employees as percentage of total
Gojo Group employees

60

5

405-1

PeopleEmployee satisfaction survey results

61

16

102-43PeoplePrograms for employee upskilling

61

16

404-2

PeopleNationalities of Gojo members

60

16

405-1

PeopleNo. of female and male members at Gojo

60

5

405-1

GHG emissions

63

13

302-1 / 305-1 /
305-2 / 305-3

Communities supported by Gojo Group64

10 / 16203-1 / 203-2 /413-1

Investment porfolio overview

14

1 / 8 / 10

201-1

Environment

Community
Investors

GRI Disclosure203-2

Contributors
Gojo Group: Arisa Oba / Arya Murali / Arnaud Ventura / Cheriel Neo / Daria Chelyukanova /Haruna Tanaka / Koh Terai / Rania Manayra / Stuart Rutherford / Taejun Shin / Takao Takahashi /Vidary Inthamone / Yoshinari Noguchi
The Dai-ichi Life Insurance Company, Ltd: Seiji Inagaki
Design: Haruka Yamada
Contact:
Cheriel Neo
cheriel.neo@gojo.co
Please reach out if you have feedback on this report or would like tocollaborate with us on impact measurement or SPM.
Gojo & Company, Inc. is headquartered in Japan, at
3-14-5 Sendagaya, Shibuya, Tokyo 151-0051
www.gojo.co© Images: Gojo & Company Inc© Gojo & Company, Inc, 2023. All rights reserved.